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Saturday 13 February 2010
S&P: Another Issuer Defaults In Week, Raises 2010 Tally To 14
One more corporate issuer defaulted this week, raising 2010's total to 14, according to Standard & Poor's Ratings Service, following a record 265 in 2009.
Defaults are persisting, even amid signs the economy is stabilizing, as credit remains tight, especially for junk-rated companies. Last year had the most defaults since S&P began tabulating the data in 1981.
The default by Bahrain-based Gulf Finance House GCS (GFH.BH) was a distressed exchange. Most credit agencies consider such moves, which include swapping debt for less than face value, a default. Many companies don't, however.
Such exchanges were the most common reason for defaults last year, and six in 2010 are for that reason. Missed interest or principal payments and bankruptcy filings are responsible for four defaults each. Ten of the 14 defaults so far are U.S. issuers.END
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