The global speculative-grade default rate slipped a little in August, according to Moody’s Investors Service.
The rating agency reports that its trailing 12-month speculative default rate came in at 2.9% in August, down slightly from July’s revised rate of 3.0%.
Only two Moody’s-rated corporate debt issuers defaulted last month, it reports. And, in the year to date, there have been 47 defaults, compared with 46 through the same period last year. North America has accounted for 27 of this year’s defaults, 13 have been in Europe, and the rest are from Latin America.
“Corporate defaults continue to track our expectations very closely,” notes Albert Metz, managing director of Moody’s credit policy research. “Absent an abrupt change in monetary policy, we expect the current low levels of corporate defaults to continue for the near term.”
Moody’s default rate forecasting model now predicts that the global speculative-grade default rate will finish 2013 at 3.1%, before falling to 2.7% in August 2014.
Over the coming year, Moody’s continues to expect default rates to be highest in the media: advertising, printing & publishing sector in the U.S., and the hotel, gaming & leisure sector in Europe.
Moody’s distressed index, which measures the percentage of high-yield issuers whose debt is trading at distressed levels, edged lower in August, sliding to 8.5% from 8.8% in July. A year ago, the index stood at 17.5%.