The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site.

All material subject to strictly enforced copyright laws. © 2020 Euromoney, a part of the Euromoney Institutional Investor PLC.

US bond defaults in October lead to rise in global default figures

The four corporate bond defaults during October were all US-based and amounted to $2.3 billion, the largest being the $1.3 billion default by Trump Atlantic City Associates. It is also the largest default this year and trumps the $1.25 billion default from the RCN Corporation. As a result, the global speculative-grade default rate for corporates has risen to 2.4% in November, its first rise since October 2003, according to Moody's. But not to worry, says the rating agency, which predicts it will fall back again to 2.3% by the end of the year before rising again in 2005.

So far in 2004, 33 issuers have defaulted on $10.8 billion, compared to 71 issuers defaulting on $31.9 billion of bonds in the same period for 2003. While the US default rate has seen an increase from 2.8% in September to 2.9% in October, European issuers haven't registered a single default since January with the default rate standing at 0.7%.

?The default rate may be approaching a cyclical low,? comments David Hamilton, director of corporate default research at Moody's. ?We expect the default rate to bottom out near 1.9% around March or April of next year before beginning to trend higher.

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.

SUBSCRIBE ONLINE TODAY

Unlimited access to Euromoney.com and Asiamoney.com

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually

FREE 7 DAY TRIAL

Unlimited access to Euromoney.com and Asiamoney.com, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors

LOGIN NOW

Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree