December 4, 2012 / 10:40 PM / 5 years ago

TEXT-S&P: 3 sectors account for half of US 2012 corp defaults

Dec 4 - With the U.S. elections out of the way, investors' attention has
shifted to the uncertainty surrounding the fiscal cliff. Moreover, despite some
positive economic data, some of the cyclical sectors in the U.S. continue to
struggle, said an article published today by Standard & Poor's Global Fixed
Income Research, titled "Stressed Sectors In Corporate America: The Media And
Entertainment, Oil And Gas, And Retail And Restaurants Sectors Account For About
Half Of The 2012 Defaults." In the report, we use three of our research
publications--weakest links, potential bond downgrades, and the distressed debt
monitor--to identify and spotlight the U.S. sectors we believe are currently
subject to the highest levels of credit stress.

"The media and entertainment, oil and gas, and retail and restaurant sectors 
are the most troubled sectors in the U.S.," said Diane Vazza, head of Standard 
& Poor's Global Fixed Income Research. In October, companies in these sectors 
had the highest risk among distressed issuers (speculative-grade companies 
with securities trading in excess of 1,000 basis points above U.S. 
Treasuries), weakest links (companies rated 'B-' or lower with negative 
outlooks or ratings on CreditWatch with negative implications), and potential 
bond downgrades (investment- or speculative-grade companies with negative 
rating outlooks or ratings on CreditWatch negative). "These sectors accounted 
for 19 of the 41 U.S. defaults in 2012 (through Nov. 20)," said Ms. Vazza. 
"Moreover, the speculative-grade corporate default rates for these three 
sectors are significantly higher than the overall default rate of 2.8% as of 
Oct. 31, 2012." 

We identified 107 companies in these sectors that meet at least one of the 
criteria. In our regular monthly articles ("U.S. Distressed Debt Monitor," 
"Global Weakest Links And Default Rates," and "Bond Downgrade Potential"), we 
include full lists of all companies that meet the criteria.

The report is available to subscribers of RatingsDirect on the Global Credit 
Portal at If you are not a RatingsDirect 
subscriber, you may purchase a copy of the report by calling (1) 212-438-7280 
or sending an e-mail to Ratings 
information can also be found on Standard & Poor's public Web site by using 
the Ratings search box located in the left column at
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