The global speculative-grade default rate dipped a little in January, according to a new report from Moody’s Investors Service.
The rate came in at 2.5% in January, down from 2.6% in December 2012, Moody’s reports. Four defaults were recorded among Moody’s-rated corporate debt issuers in the month, compared with eight during the same period last year.
“The pace of corporate defaults continues to match our expectations,” notes Albert Metz, managing director of credit policy research at Moody’s. “Ample market liquidity will continue to ease default pressures over the near term.”
Based on its forecasting model, Moody’s expects the global speculative-grade default rate to end 2013 at 2.7%. If realized, this will be well below the average of 4.8% since 1983, it notes. The rating agency says it expects default rates to be highest in the media: advertising, printing & publishing sector in both Europe and the United States.
By dollar volume, the global speculative-grade bond default rate dropped to 1.2% in January from 1.7% in December, Moody’s reports. At this time last year, the rate was 1.5%.
Moody’s reports that its global distressed index also declined in the month. It came in at 12.1% in January, down from December’s 14.1%. A year ago, the index stood at 21.4%.