The share of global corporate speculative-grade ratings increased to 44.1% at the end of June 2011 from 41.6% one year earlier, said a new article published by Standard & Poor’s, titled “A Snapshot Of The Corporate Ratings Distribution For The US, Europe, Emerging Markets, And Other Developed Region.”
As of June 30, 2011, Standard & Poor’s Ratings Services rated 2,667 entities speculative grade and 3,379 investment grade. These figures bring the total count of rated entities to 6,046, up by 7% from 5,638 a year ago.
In Europe, Standard & Poor’s rated 1,218 issuers as of June 30, of which 922 are investments grade and 296 are speculative grade. Speculative-grade ratings make up 24.3% of European ratings, a significant increase from 19.2% a year earlier. In the second quarter, the median rating in Europe changed to ‘BBB+’ from ‘A-‘. The total count of European rated entities increased to 1,218 from 1,132 over the past year. The proportion of issuers rated in the ‘AAA’, ‘AA’, and ‘A’ categories was 49.3% as of June 30, 2011, down 6.1% from 55.4% at the end of June 2010. In contrast, the proportion of issuers in the ‘BBB’, ‘BB’, and ‘B’ categories increased 6.2% to 49.3%. By country, 18% of European entities are in the U.K., followed by 13% in France and 9% in Germany
“The share of entities rated ‘CCC’ and lower as of June 30, 2011, decreased to 2.2% from 3.1% at the same time in 2010,” said Diane Vazza, head of Standard & Poor’s Global Fixed Income Research. “The median rating of all rated entities has remained at ‘BBB-‘ since the second quarter of 2010.”
“During second-quarter 2011, 15 companies defaulted globally, and the 12-month-trailing speculative-grade default rate was 2% as of June 30,” said Vazza. “Upgrades surpassed downgrades in the US and emerging markets during the quarter, and the global ratio of upgrades to downgrades was 0.64 to 1.”