The default rate for speculative-grade securities rose in August, according to the latest data from Moody’s Investors Service.
Moody’s reports that the trailing 12-month global speculative-grade default rate came in at 3.0% in August, up from 2.8% in July. A total of 43 Moody’s-rated corporate debt issuers have defaulted so far this year, the rating agency says, adding that three defaulted in August.
“The rate of default has remained remarkably steady,” notes Albert Metz, managing director of Moody’s credit policy research. “As credit spreads continue to narrow slightly, our forecast remains fairly benign.”
Moody’s forecasts the global speculative-grade default rate will end the year at 3.1%, which is well below the historical average of 4.8%. It expects default rates to be highest in media sector in the United States, and in the hotel, gaming, & leisure sector in Europe.
Moody’s distressed index came in at 17.5% in August, down from 18.3% in July. A year ago, the index was higher at 19.3%, it says.