Global speculative-grade default at a seven-year low of 1.4% in 2014

London (Capital Markets in Africa):- Standard & Poor’s indicated that 60 corporate issuers worth $91.6bn in rated debt defaulted globally in 2014, down from 81 defaulted issuers worth $97.3bn in 2013. It noted that the number of defaults reached its lowest level since 2011 despite considerable geopolitical turmoil, the ending of the U.S. Federal Reserve’s monthly asset purchases, and the steep decline in global oil prices.

Also, it added that the outstanding debt volume that defaultedwas in line with the $91.5bn average in the five years after the global financial crisis. The United States accounted for 55% of the number of defaults globally in 2014, the lowest in the past 34 years, followed by emerging markets (25%), and Europe and other developed countries (10% each).

Further, S&P pointed out that the overall global default rate dropped to 0.69% in 2014 from 1.06% in 2013. It added that the global speculative-grade default rate fell to a seven-year low of 1.42% from 2.28% at the end of 2013, reflecting a smaller number of defaults and an increase in the number of speculative-grade issuers to 3,163 from 2,804 a year earlier.

At the same time, S&P indicated that it downgraded 8.4% of corporate ratings in 2014 relative to 9.4% in 2013, while it upgraded 9.3% of the ratings compared to 11.4%. While 74.5% of the ratings remained unchanged.