Kamakura Troubled Company Index Shows Very Significant Credit Quality Deterioration in October
Location: New York In October, the percentage of the global corporate universe with default probabilities between 1% and 5% was 7.27%, an increase of 56 basis points. The percentage of companies with default probabilities between 5% and 10% was 1.85%, an increase of 37 basis points. The percentage of the universe with default probabilities between 10 and 20% was 1.06% of the universe, up 5 basis points, while the percentage of companies with default probabilities over 20% was 0.92% of the total universe in October, an increase of 19 basis points. David Boldon, Washington DC representative for Kamakura Corporation, said Tuesday, “The very substantial decrease in credit quality is coming from a wide array of smaller firms who do not have legacy agency ratings. No rated firm showed an increase in one month default probabilities of more than 33 basis points this month. Over the course of October, the day by day deterioration in public firm credit quality has been steady and of great concern.” |
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