The speculative grade default rate slipped in November, according to Moody’s Investors Service.
The rating agency reports that the trailing 12-month global speculative-grade default rate came in at 2.7% last month, down from 3.1% in October. A total of 53 Moody’s-rated corporate debt issuers have defaulted so far this year, with three defaulting in November, it says.
“Corporate defaults remain rare, in keeping with our recent expectations,” says Albert Metz, managing director of Moody’s credit policy research. “We are concerned about the possibility of significant economic and financial disruptions following a fiscal crisis in the U.S.. Still, if liquidity and funding remain available, our baseline expectation is that corporate default rates will remain below historical averages.”
Based on its forecasting model, Moody’s now expects the global speculative-grade default rate to end 2012 at 2.7%, which if realized is well below the average of 4.8% since 1983. Moody’s expects default rates to be highest in the media: advertising, printing & publishing sector in the United States, and the hotel, gaming & leisure sector in Europe.
Moody’s global distressed index came in at 15.1% in November, up slightly from October’s 14.7%. A year ago, the index was at 24.1%.