The Residential Real Estate Crash Index Message Board

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Strategies & Market Trends : The Residential Real Estate Crash Index

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To: Smiling Bob who wrote (216091)	8/17/2009 6:54:02 PM
From: Giordano Bruno	Read Replies (1) of 306849

14% defaults by 2010? The second quarter of 2009 set a new record for the number of corporate defaults, with 82 non-financial events of default, consisting of 16 names in media and entertainment, 15 in autos and 15 in natural resources, according to a new report published by S&P. The total amount of defaulted debt was $254 billion, far larger than the $102 billion spread among 69 defaults in all of 2008. Of the second-quarter defaults, the largest portion (about 42%) resulted from distressed exchanges, 28% from missed payments, and 27% from bankruptcies. Distressed exchanges occur when a borrower offers creditors securities or cash in exchange for their debt claim that are worth less than the nominal present value of their original claim. S&P is still predicting a record amount of speculative-grade defaults over the next 12 months, with an expected peak around Q1 of 2010, hitting a total of 13.9% of issuers some time in mid-2010.

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