July 2, 2010 / 3:44 PM / 10 years ago

Global credit conditions improved in June-Kamakura

NEW YORK, July 2 (Reuters) - The number of companies at risk globally of defaulting on their debt fell slightly in June, resuming an improving trend in global credit conditions, risk management firm Kamakura Corp said on Friday.

The proportion of companies across the globe at risk of defaulting on their debt fell 0.09 of a percentage point in June to 10.21 percent of the more than 29,000 companies Kamakura rates.

This resumes an improving trend, after the index increased in May. The index has improved in 13 of the last 14 months. A company is considered at risk when its short-term default probability is greater than 1 percent.

The number of at-risk firms has declined from 24.3 percent in March 2009 and is down from the all-time peak of 28 percent in September 2001, Kamakura said in a statement. The index’s all-time low was 5.4 percent in May 2006, said Kamakura, which is based in Honolulu, Hawaii.

The number of companies globally with a default probability of more than 20 percent fell by 0.08 of a percentage point in June to 0.61 percent of the companies in Kamakura’s database. That is down from 3.1 percent in March 2009.

Those with a 10 percent to 20 percent default risk fell by 0.04 of a percentage point to 0.97 percent of the total universe, the company said.

Companies with a 5 percent to 10 percent default risk, meanwhile, decreased by 0.05 of a percentage point to 1.57 percent in the month, and companies with a 1 percent to 5 percent default probability increased by 0.08 of a percentage point to 7.06 percent, Kamakura said.

Reporting by Karen Brettell; Editing by Andrew Hay

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