April 2 (IFR) - Credit research firm Kamakura Corporation
said its index of troubled public companies decreased by 0.44%
to 7.43% for the month of March, the first monthly improvement
in its corporate credit measure since November.
But with Cyprus bringing the eurozone debt crisis back into
the spotlight, the company warned that default risk could
increase going forward.
The Kamakura index measures the percentage of more than
30,000 public firms in 37 countries that have a default
probability over 1%.
As of March 28, the percentage of global companies in the
index with default probabilities between 1% and 5% was 6.06%.
The percentage with default probabilities between 5% and 10% was
0.86%, while the percentage between 10% and 20% was 0.38%. For
default probabilities over 20%, it was 0.13%.
"March closed with all eyes focused on the eurozone as a
result of the debt crisis in Cyprus," said Kamakura chief
administrative officer Martin Zorn. "This renewed focus on
eurozone debt and, moreover, uninsured depositors (is) reflected
in the number of European financial companies having large
increases in their default probabilities."
While the index showed month to month improvement, it
remains likely that risk will increase moving forward, said
Among the ten riskiest firms on the Kamakura index, two are
from Italy and one each from Brazil, Germany, Greece, Ireland,
Mexico, Russia, Spain and the United States.
Telecom Italia has the world's highest one-month
default risk among rated companies, with an annualized default
probability of 33.87%, according to Kamakura.
Central European Distribution Corp had the highest
default probability of any rated firm in the United States at
Separately, the Standard & Poor's corporate default rate
edged higher in March to 2.4% from 2.3% in February.
The default rate increased steadily during the first nine
months of 2012 - peaking at 2.96% in September 2012 - before
declining during the next five months and reaching 2.3% in