Creditflux Newsletter

Moody’s global high yield default rate fell to 1.8% in November from 1.9% in October, according to its monthly default report, despite a spike in the number of bankruptcies. The rolling 12-month figures fell because the number of defaulters exiting the 12-month trailing window offset the new defaulters, as November 2010 was also a big month for defaults.

While US rates remained at 2.0% from October, an increase in outstanding issues - rather than fewer defaults - meant the European rate fell slightly from 2.6% in October to 2.5% in November.

Moody’s counted 10 corporate defaults in November. Eight came from the US and two from Europe. This brings the total to 31 corporate defaults in the year so far, compared to 55 for the same period last year.   

Large bankruptcies from AMR and Dynegy Holdings meant that defaults worth almost five times as much occurred in November than October, with the total amounts in default being $8.7 billion and $1.8 billion respectively. No leveraged loan defaults were recorded by Moody’s in November.