Moody's: Global spec-grade default rate declines slightly to 2.9% in October
Moody's "October Default Report" is now available, as are Moody's other default research reports, in the Ratings Analytics section of Moodys.com.
"Default rates remain low, stable and very close to our expectations," notes Albert Metz, Managing Director of Moody's Credit Policy Research. "There are differences by region, with a higher default rate in the US than we see in the rest of the world. But the pace of defaults overall remains very low by historic standards."
In the US, the speculative-grade default rate edged lower in October, to end the month at 3.4%, compared with 3.5% in September. In Europe the rate declined to 2.5% in October, down from a revised level of 2.8% in September. The decrease in the European default rate was driven mainly by one defaulter moving out of the 12-month trailing window. Last year, the European default rate was 2.9% at the end of October.
Based on its forecasting model, Moody's now expects the global speculative-grade default rate to end 2012 at 2.8%. If realized, this is well below the historical average of 4.8% since 1983.
Across industries, Moody's expects default rates to be highest in the Media: Advertising, Printing & Publishing sector in the US, and the Hotel, Gaming & Leisure sector in Europe.
By dollar volume the global speculative-grade bond default rate edged lower, to 1.9% in October from 2.0% in September. At this time last year, the rate was 1.7%.
In the US, the dollar-weighted speculative-grade bond default rate came in at 1.5% in October, down from 1.6% in September. The rate was 1.1% in October 2011.
In Europe, the dollar-weighted speculative-grade bond default rate remained unchanged at 3.3% from September to October. Last year, the rate stood at 3.9% at end-October.
Moody's global distressed index came in at 14.7% in October, down from 17.0% in September. A year ago, the index was 29.5%.
In the leveraged-loan market, Vertis was the only Moody's-rated defaulter in October. The company sent Moody's trailing 12-month US leveraged loan default rate to 2.7% in October, up from 2.6% in September. In October last year, the rate was 1.2%.
Moody's research subscribers can access this report at http://www.moodys.com/research/Monthly-Default-Report-October-2012--PBC_147151.
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Albert Metz MD - Credit Policy Research Moody'sInvestors Service, Inc.Moody's Investors Service, Inc.250 Greenwich StreetNew York, NY 10007 U.S.A. JOURNALISTS: 212-553-0376 SUBSCRIBERS: 212-553-1653Sharon Ou Vice President - Senior Analyst Moody's Investors Service, Inc. JOURNALISTS: 212-553-0376 SUBSCRIBERS: 212-553-1653 Releasing Office: Moody's Investors Service, Inc.250 Greenwich StreetNew York, NY 10007 U.S.A. JOURNALISTS: 212-553-0376 SUBSCRIBERS: 212-553-1653(C) 2012 Moody's Investors Service, Inc. and/or its licensors and affiliates (collectively, "MOODY'S"). All rights reserved.
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