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
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