Credit improvement slowed in October - Kamakura

NEW YORK, Nov 2 (Reuters) - The number of companies at risk globally of defaulting on their debt fell in for the eighth consecutive month in October to the fewest since 2007, though the rate of credit improvement slowed, according to risk management firm Kamakura Corp.

The proportion of companies at risk of defaulting on their debt globally fell 0.22 percentage points in October to 10.68 percent of the almost-27,000 companies the company rates globally, the lowest since December 2007, said Kamakura.

While credit quality improved overall, "a number of companies have shown a significant increase in default risk," Warren Sherman, president at Kamakura, said in a release on Monday.

A company is considered troubled when its short-term default probability is in excess of 1 percent. The index jumped to 24.3 percent in March and hit an all-time peak of 28 percent in September 2001.

The index's all-time low was 5.4 percent in April and May of 2006, said Kamakura, which is based in Honolulu, Hawaii.

Companies with the largest increase in short term default risk in October included CIT Group CIT.N, Citadel Broadcasting, Allied Irish Bank (ALBK.I), Bank of Ireland BKRI.I and Ambac Financial Group (ABK.N), Kamakura said.

CIT filed for bankruptcy protection on Sunday. For more see [ID:nN01408863]

The number of companies globally with a default probability of more than 20 percent fell by 0.11 percentage point in October to 0.69 percent of the companies in Kamakura's database. This has fallen from 3.1 percent in March.

Those with a 10 percent to 20 percent default risk also fell by 0.09 percentage point to 1.01 percent of the total universe, the company said.

Companies with a 5 percent to 10 percent default risk dropped by 0.09 percentage point to 1.61 percent in the month, and companies with a 1 percent to 5 percent default probability decreased by 0.03 percentage point to 7.37 percent, Kamakura said.

(Reporting by Karen Brettell; editing by W Simon )