Default Study: 2010 Annual Australia & New Zealand Corporate Default Study And Rating Transitions May 11

Standard & Poors, May 2011

Abstract
The Australia and New Zealand rated issuer pool for calendar year 2010 returned a record seven defaults. All had been rated noninvestment grade prior to default. The default rate, inclusive of short-lived ones, was 3.11%, nearly triple the 1.14% rate of the global issuer pool. Six of the seven defaults came from New Zealand's finance company sector, which is still suffering from the long-tailed aftermath of that country's 2008-2009 economic recession. Not surprisingly, the negative ratings momentum of the Australia and New Zealand issuer pool continued for the third year in 2010. The downgrade-to-upgrade ratio (excluding defaults) was 1.57x, which is double that of the global pool's 0.73x. The premise that lower ratings correspond to shorter time to default continues...

Companies mentioned in this report are: Australia (Commonwealth of) (Unsolicited Ratings),New Zealand

Standard and Poors RatingsXpress Credit Research provides in-depth coverage of international corporates, financial institutions, insurance companies, utilities, sovereigns and structured finance programs. RatingsXpress Credit Research lets users determine the credit rating of holdings and identify key factors underlying an issuer's creditworthiness, distinguishes the different risk exposures for new and existing deals, and provides an understanding of how their analysts interpret key regulatory, political and environmental events and their economic impact.

Research Type: Commentary
Criteria articles describe the thought process and methodology Standard & Poor's analysts use in determining ratings. These commentary pieces discuss both the quantitative (economic and financial) and qualitative (business analysis and caliber of management) aspects of the analysis, as well as legal issues.

Australia (Commonwealth of) (Unsolicited Ratings),New Zealand

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