S&P speculative-grade default rate climbs to 2.02% in second quarter

By Caroline Salls

Pittsburgh, Sept. 3 – Standard & Poor’s said its trailing-12-month speculative grade default rate rose to 2.02% in the second quarter from 1.81% in the first quarter, according to a report released Thursday.

S&P said 34 companies defaulted globally in the second quarter, representing $36 billion in outstanding debt.

Of the 34 entities that defaulted in the second quarter, 20 were in the United States, four in Greece, three in Brazil and one each in Japan, Finland, Russia, Ukraine, the British Virgin Islands, Denmark and Israel. S&P said three of the defaulters are confidentially rated.

While default rates across all rating categories over the past four quarters are substantially lower than their long-term averages, the ratings agency said some stress is beginning to appear.

S&P said there were 59 defaults in the first half of 2015, much higher than the first-half total of 26 defaults from 2014.

Despite this, S&P said the total outstanding debt at the time of default is down to $56 billion from $62 billion at the same point last year.

If the same number of defaults is seen in the second half of the year as in the first, S&P said 2015 could finish with a total of 118 defaults, the highest since 268 defaults were recorded in 2009.

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