May 30, 2012 / 6:13 PM / 5 years ago

TEXT-S&P: weakest links remain high

May 30 - The number of global weakest links decreased to 126 as of May 21
from 127 as of April 25, said an article published today by Standard & Poor's
Global Fixed Income Research, titled Global Weakest Links And Default Rates: The
Weakest Links Count Decreases.	
	
Weakest links are issuers rated 'B-' and lower with either negative outlooks 	
or ratings on CreditWatch with negative implications. The 126 weakest links 	
have total rated debt worth $196.9 billion. 	
	
"In 2012, 35 issuers so far have defaulted through May 21, including 	
confidential entities," said Diane Vazza, head of Standard & Poor's Global 	
Fixed Income Research. "These defaulted issuers have outstanding debt worth 	
$41.9 billion." 	
	
In 2011, 53 defaulted issuers had combined outstanding debt worth $87.7 	
billion. By comparison, 82 issuers defaulted on debt worth $97.5 billion in 	
2010, and 264 issuers defaulted on debt worth $627.7 billion in 2009. 	
	
The 12-month-trailing global corporate speculative-grade default rate fell to 	
2.28% in April from 2.4% in March. Regionally, the U.S. corporate 	
speculative-grade default rate rose marginally to 2.59% from 2.53%, while the 	
European default rate again dipped slightly to 2.22% from 2.27%. The default 	
rate in the emerging markets also decreased, to 1.3% from 1.47%. 	
	
The U.S. has the highest number of weakest links with 81, or 64.3% of the 	
global total. "By sector, media and entertainment, banks, metals, mining, and 	
steel, forest products and building materials, and homebuilders and real 	
estate companies have the greatest concentrations of weakest links," said Ms. 	
Vazza.	
	
The U.S. economy grew at an annualized rate of 2.2% in the first quarter of 	
2012, according to advanced estimates. In the fourth quarter of 2011, real GDP 	
grew by 3%.	
	
In the U.S., 30 new speculative-grade deals came to market in May 2012 	
(through May 21), following 36 deals in April and 64 deals in March 2012. 	
	
The report is available to subscribers of RatingsDirect on the Global Credit 	
Portal at www.globalcreditportal.com. If you are not a RatingsDirect 	
subscriber, you may purchase a copy of the report by calling (1) 212-438-7280 	
or sending an e-mail to research_request@standardandpoors.com. Ratings 	
information can also be found on Standard & Poor's public Web site by using 	
the Ratings search box located in the left column at www.standardandpoors.com.

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