month global speculative-grade default rate finished the first quarter of 2011 at 2.6 percent, down from 3.2 percent at the end of 2010 and consistent with Moody's year-ago forecast of 2.4 percent, Moody's Investors Service said in its latest default report. A year ago, the global default rate stood at 10.0 percent. There were four defaults among Moody's-rated corporate debt issuers in March, bringing the total in 2011 to eight, year to date. In the first quarter of 2010, 17 companies defaulted. Moody's forecasting model predicts that the global speculative-grade default rate will fall to 1.5 percent in December 2011 and edge higher to 1.6 percent in March 2012. "Our expectation is that even with a sluggish economic recovery for the next year, corporate default rates will remain low," said Albert Metz, managing director of Credit Policy Research. In the US, the speculative-grade default rate ended the first quarter at 2.9 percent, down from 3.4 percent at the end of 2010. A year ago, the default rate in the US stood at 11.0 percent. For US speculative-grade issuers, Moody's forecasting model foresees the default rate declining to 1.8 percent a year from now. In Europe, the default rate edged lower in the first quarter to 2.2 percent, from 2.3 percent the previous quarter. It was 7.0 percent a year ago. In Europe, Moody's anticipates the rate declining to 1.3 percent in a year. Moody's notes that the current 2.6 percent global speculative-grade default rate is consistent with Moody's forecast of 2.4 percent made a year ago.
