Moody’s: Default Rate Falls to 11.6%
March 5, 2010
The trailing 12-month global default rate dropped to 11.6% from 12.5%, according to a report by Moody’s Investors Service. The rating agency said that the speculative-grade default rate dropped by almost a full percentage point as well.
The speculative-grade global default rate fell to 12.7% in February from 13.6% in January, and Moody’s predicts that the global speculative-grade default rate will drop to 2.9% by the end of the year and reach 2.7% by February 2011.
The Moody’s report notes that Europe’s default rates are lower than those of the U.S. The European speculative-grade default rate fell to 9.7% in February from 10.9% in January, and will likely drop to 1.7% by this December. The agency predicts a slight uptick in the European junk default rate to reach 2% by February 2011.
Moody’s said it expects the U.S. speculative-grade default rate to drop to 3.3% by this December and to 3% by February 2011. Standard & Poor’s forecasts that the U.S. speculative-grade default rate will reach 5% by the end of 2010.
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