Posted Date : 17 Mar 2011
MARC released its 2010 Annual Corporate Default and Ratings Transition Study today. The report discusses rating and bond market trends in 2010.
ratings of the remaining 80% were affirmed. Corporate rating migrations over the period studied indicated an improvement in corporate credit quality over the previous year. There were three
issuer defaults throughout the year, a decline of 50% from 2009’s six issuer defaults.
payments on their respective obligations. The number is comparable to the long-run issuer weighted average default rate of 2.6% estimated over the last 14 years, according to the study.
upgraded the debt ratings of six issuers over the period studied and downgraded the debt ratings of 14 issuers, resulting in upgrade and downgrade rates of 5.2% (2009: 2.2%) and 12.2% (2009: 6.0%)
industry-specific developments. Half of the downgrades in 2010 came from the Selangor water sector-related issuers whose cash flows were negatively affected by the standstill in the water
industry restructuring process. Excluding the Selangor water sector-related issuers, the downgrade rate stands at 6.1%.
ten issuers recorded in 2009, translating to a fallen angel rate of 2.6%, compared to 7.5% in the previous year.
should further translate to an easing operating environment among corporations. Additionally, the agency is also of the view that the return of confidence among investors seen post-global
financial crisis should translate to higher demand for relatively riskier asset classes, including corporate bonds.
in MARC’s gross domestic product (GDP) growth forecast of 5.3% for 2011.
Wan Murezani Mohamad, +603-2082 2232 / firstname.lastname@example.org,
Thong Chui Yee, +603-2082 2257 / email@example.com.