LONDON Dec 19 The number of firms worldwide
that have defaulted this year has reached 150, up more than 40
percent year-on-year, making 2016 the worst year for corporate
stress since the height of the global financial crisis, ratings
firm Standard and Poor's said.
S&P data showed that two defaults last week by U.S.-based
firms had brought up the milestone and taken the U.S.-only count
to 99, or two-thirds of the overall total.
Just over 40 percent, or 63, had been by oil and gas firms,
with 50 of those also in the United States. Emerging markets had
accounted for 28 defaults overall, followed by Europe on 12.
"The default count has already surpassed the total number of
defaults recorded in full-year 2015 (113) and is almost 42
percent higher than the count at this time in 2015," S&P said.
"The last time the global tally was higher at this point in
the year was in 2009, when it reached 265 during the financial
Of the 150 defaulters so far in 2016, 56 issuers defaulted
because of missed principal/interest/coupon payments, 40 due to
distressed debt exchanges and 18 upon bankruptcy filings, while
14 were for 'confidential' reasons.
A further seven came after debt exchanges, six were de facto
restructurings, three due to deferred interest payments, two
due to debt moratoriums, and one each because of debt
acceleration, distressed restructuring, judicial reorganization
and regulatory intervention.
The default trend is likely to continue next year, although
there could be some moderation.
S&P said it expects the U.S. corporate trailing-12-month
speculative-grade default rate to rise to 5.1 percent by
September 2017 from 5.0 percent in September 2016.
It said it also expected the 'speculative-grade' company
default rate to "continue rising with temporary fluctuations
through early 2017, then levelling off toward the end of the
first half of the year with declines afterward."
Oil and gas firms could see the recent pressure ease as
production costs have come down since the early part of 2016,
(Reporting by Marc Jones; Editing by Mark Trevelyan)