S&P: Three Corporate Defaults Bring Total to 181
July 17, 2009
Three corporate issuers defaulted this week, bringing the 2009 year-to-date tally to 181 issuers, nearly four times the 46 defaults at this time last year, according to Standard & Poor’s.
Two U.S. companies, Euramax International and RathGibson, defaulted, along with NXP B.V., a European company. There have been 130 defaults in the U.S., nine in Europe, 30 in emerging market countries and 12 in Australia, Canada, Japan, and New Zealand. (For a complete list of corporate defaults, see list below).
The increase in defaults reflects a “pronounced decline in economic fundamentals and earnings prospects, as well as the continued credit freeze, effectively halting lending to speculative-grade borrowers,” S&P analysts said. “A large number of defaults likely will be concentrated in the first two or three quarters of 2009, as a result of these factors, coupled with distressed exchange offers.”
Distressed exchanges have surged this year, with the midyear tally at 51, three times more than all of the distressed exchanges in 2008 and 12 times more than in 2007.