Moody’s: Default Rate Falls to 5%
September 8, 2010
The global high yield default rate dropped to 5% in August from 5.5% in July, according to a report issued Wednesday by Moody’s Investors Service. The default rate was 12.3% at this point last year.
The ratings agency predicts that the global speculative-grade default rate will fall to 2.7% by the end of 2010 and be lower than 2% a year from now.
The U.S. speculative-grade default rate dropped to 5.1% in August from 5.4% in July, and Moody’s predicts it will reach 2.9% in December. The agency predicts that the European default rate will drop to 2.3% by December.
A total of 38 Moody’s-rated issuers have defaulted so far in 2010, compared with 214 defaults for the same period in 2009.
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