GLOBAL - Corporate bond defaults have soared to record levels, with 196 issuers defaulting on approximately US$107bn of debt through December 7, 2001, according to Standard & Poor's, the global rating agency.
The previous record of 117 issuers defaulting on US$42.3bn of debt was set for all of 2000.
The absolute number and dollar amount of defaults are unprecedented, and default rates the percentage of issuers defaulting, are approaching 1991 record levels when the economy also was in recession, said Brooks Brady, author of the study for Standard & Poor's Risk Solutions.
The default rate for all issuers currently stands at 3.71%, which is the highest level since 1991 when 3.96% of all issuers defaulted. Of the high-yield issuers 8.92% defaulted and 0.60% of investment-grade issuers have defaulted this year. These are the highest rates since 1991 when 12.73% of high yield issuers and 0.81% of investment-grade issuers defaulted.
Investment-grade defaults through December totalled 20, the largest we have ever recorded, Brady said. To put this number in perspective, there were 13 investment-grade defaults in 1991.
While these are preliminary figures, they will almost certainly increase by the end of the calendar year. Default statistics for 2001 will be finalised and published in more detail in early 2002.
An innovative funding structure has been agreed for Croydon Pension Fund. However, there are some concerns about the arrangement. Stephanie Baxter reports
Some 52% of red flags raised by schemes on suspected scam pension transfers involve advisers or unregulated introducers, a report by the Pension Scams Industry Group (PSIG) has claimed.
The Norfolk Pension Fund has been successful as the lead plaintiff in a class action case that went to jury trial in California involving securities fraud.
In this week's Pensions Buzz, we want to know whether bosses should have to pay into the same staff DB scheme as their workers rather than their own executive pension fund.