March 17, 2014 / 8:52 PM / 4 years ago

Fitch: Global Corporate Default Rates Modest in 2013

(The following statement was released by the rating agency) NEW YORK, March 17 (Fitch) Europe's fragile emergence from recession coupled with soft US growth and slowing emerging market activity remained key factors affecting global corporate credit quality in 2013, according to a new Fitch Ratings report. However, macro challenges were balanced by good industrial fundamentals and a calmer operating environment for financial institutions. The global corporate default rate remained low in 2013 at 0.51%. The emerging market default rate was 1.12% and the developed market rate, 0.26%. In addition, the vast majority of ratings, 81.7%, remained the same in 2013. Downgrades (9.8%) marginally topped upgrades (8.5%). Rating activity was similar to 2012 across both industrials and financials, with the exception that the share of financial institutions downgraded (8.4%) was down from 12.4% in 2012 and at the lowest level since 2007. Overall, the margin of downgrades to upgrades was 1.3 to 1 across industrials and 1 to 1 across financial institutions in 2013. Issuer downgrades trailed upgrades for the fourth consecutive year, across emerging markets (0.9 to 1), but by a smaller margin than in 2012 (0.7 to 1). Among advanced economies, downgrades continued to outpace upgrades by 1.3 to 1 in 2013, a modest improvement from 1.6 to 1 in 2012. By year-end 2013, 'BBB' rated issuers remained more abundant across the mix of global financial and industrial entities - 36% and 43% of outstanding ratings, respectively. Fitch's new study provides data and analysis on the performance of Fitch's global corporate finance ratings in 2013 and over the long term, capturing the period 1990 to 2013. The report provides summary statistics on the year's key rating transition and default trends. The study is titled 'Fitch Ratings Global Corporate Finance 2013 Transition and Default Study' and is available on Fitch's web site under Credit Market Research at ''. Contact: Charlotte Needham Senior Director +1-212-908-0794 Fitch Ratings, Inc. One State Street Plaza New York, NY 10004 Mariarosa Verde Managing Director +1-212-908-0791 Kellie Geressy-Nilsen Senior Director Fitch Wire +1 212 908-9123 Media Relations: Brian Bertsch, New York, Tel: +1 212-908-0549, Email: Additional information is available on The above article originally appeared as a post on the Fitch Wire credit market commentary page. The original article, which may include hyperlinks to companies and current ratings, can be accessed at All opinions expressed are those of Fitch Ratings. Applicable Criteria and Related Research: Fitch Ratings Global Corporate Finance 2013 Transition and Default Study here ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: here. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.

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