The number of companies in danger of defaulting on their debt fell for the sixth straight month, according to Standard & Poor’s.
So-called weakest links, issuers rated B- and lower held on negative watch or with a negative outlook status, fell 52 percent from a year earlier to 133, S&P wrote in a report on Aug. 13. That is eight fewer than in July, S&P said. The companies vulnerable to a downgrade have rated debt valued at $146 billion, S&P said.
The U.S. has the highest number of weakest links, with 93 issuers in the category, according to S&P. Media and entertainment companies, as well as oil and gas and financial institutions are the dominant sectors. The New York-based ratings company’s B- grade is six steps below investment grade.
“Companies rated ‘B-’ and lower have a notable amount of debt coming due over the next four years,” Diane Vazza, head of S&P’s global fixed-income research, said in the report. “In the U.S., for instance, approximately $235 billion in ‘B-’ and lower rated debt is maturing among non-financial issuers between 2011 and 2014.”
The 12-month trailing global corporate-default rate also continued to decline, falling for the eighth straight month to 4.51 percent from 5.05 percent in June, according to S&P.
To contact the reporters on this story: Caroline Hyde in London chyde3@bloomberg.net;
