Bond default rates low but pressure builds - S&P
LONDON, March 15 (Reuters) - Ample liquidity kept global bond default rates at historic lows in February, although pressure is mounting as the number of new bonds with low ratings increases, ratings agency Standard & Poor's said.
Global corporate speculative-grade bond default rates fell to 1.17 percent in February, from 1.18 percent in January, Standard & Poor's said in a report on Thursday.
The only default recorded in February was Britain's Luxfer Holdings Plc, a supplier to the aerospace, automotive and defence industries, which defaulted on $259 million of debt.
"Distress and defaults continue to be suppressed by abundant liquidity and generous financing provisions," said Diane Vazza, head of Standard & Poor's global fixed-income research group in New York.
The ratings agency expects default rates to increase over the next few months as the pipeline of low-rated bond issuance remains "considerable," S&P said.
Deals rated B- or lower accounted for 45.2 percent of all speculative-grade issuance in the U.S. at the end of February, up from 44.6 percent a month ago, the report said. This ratio has risen for more than 14 quarters, the agency said. (Reporting by Elena Moya, Editing by Erica Billingham; Reuters Messaging: rm://elena.moya.reuters.com@reuters.net Email: elena.moya@reuters.com Telephone: +44 207 542 2515)
