The global speculative-grade default rate declined in November, and Moody’s Investors Service says that it expects the rate to remain stable in the year ahead.
The rating agency reports that the speculative default rate came in at 2.7% in November, down from 2.9% in October. It’s forecasting the rate will finish the year at 2.8%, before falling to 2.7% in November 2014.
“Ample credit market liquidity along with stable, if not robust, economic growth have put defaults in 2013 on the same pace as what we saw in 2012,” notes Albert Metz, managing director of Moody’s credit policy research. “We expect this trend to continue in 2014.”
In the coming year, Moody’s expects default rates to be highest in the consumer services sector in the U.S., and in the retail sector in Europe.
Moody’s global distressed index, which measures the percentage of high-yield issuers with debt trading at distressed levels, also declined in November, to 7.3% from 8.3% in October. A year ago, the index stood at 15.1%.