NEW YORK--()--Fitch Ratings has released a study examining default trends across the universe of Fitch-rated global corporate, sovereign, public finance, and structured finance securities in the first half of 2012 (1H'12).
Global default activity moderated further in 1H'12. Fitch recorded no investment-grade defaults across the agency's portfolio of global securities. Default levels remained modest across the corporate, sovereign, ABS, and public finance sectors with all defaults associated with speculative grade entities. Default activity was more pronounced across CMBS, RMBS, and structured credit but showed improvement year over year.
Fitch recorded nine corporate finance defaults (financials and industrials) in 1H'12, all of which involved speculative-grade borrowers. The Fitch-rated corporate default rate through June was 0.33%. There were no corporate defaults in 1H'11.
One sovereign default was recorded through June; Greece's default was the result of the country's distressed debt exchange completed earlier this year. The resulting sovereign issuer default rate was 0.96%.
The U.S. public finance sector produced a single speculative-grade default in the first six months of the year, mirroring 2011 results. The U.S. public finance default rate was 0.03% through June. There were no Fitch-rated international public finance defaults in 2011 or in 1H'12.
Impairment activity (default or near default) across the universe of Fitch-rated global structured finance securities showed considerable improvement year over year. The structured finance impairment rate was 2.8% versus 4.9% in first half of 2011, with defaults solely at the speculative grade level (8.2% impairment rate versus 15.5% in 2011).
The full study 'Fitch Ratings Global Cross-Asset First-Half 2012 Default Update' is available on Fitch's web site under Credit Market Research. The study contains default rate results by broad sector and region.
Additional information is available at 'www.fitchratings.com'.
Applicable Criteria and Related Research: Fitch Ratings Global
Cross-Asset First-Half 2012 Default Update