S&P estimates September U.S. speculative-grade default rate up to 3%

By Caroline Salls

Pittsburgh, Oct. 2 - Standard & Poor's estimated that the 12-month-trailing U.S. speculative-grade corporate default rate increased to 3% in September from 2.8% in August, according to a report titled "The U.S. Corporate Default Rate Increases As The Lowest Rated New Issue Market Heats Up."

S&P said it forecasted last year that the default rate would increase to 3.1% in September 2012.

The estimated September rate is up from 2% as of the end of 2011, the report said.

The ratings agency said the default rate has been steadily increasing since the beginning of the year and is now at a level not seen since December 2010.

S&P said Marsico Holdings LLC and GMX Resources Inc. defaulted in September. The year-to-date default count is 33, including entities that were not rated at the time of default and confidentially rated entities.

S&P said it saw investors embracing risk as speculative-grade issuance picked up momentum. A record number of lowest rated new issues, those rated B- and below, came to market during the month.

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