By Shira Ovide
Corporate America may be growing more credit-worthy, according to Moody’s, which says companies’ debt default rates are expected to fall below 3% by year end — the same level as before the September 2008 financial crisis, reports WSJ’s Mike Spector.
A new Moody’s report also says there was a pronounced drop in the number of companies the firm considers on the lowest-level of creditworthiness. That list now consists of 195 companies, the lowest level in two years and down from some 288 companies on what used to be called the “bottom rung” in June 2009.
Read the full Moody’s report here.
As Spector reports, Moody’s cautions it doesn’t have enough information to call a trend. “The current list may be at or near a long-term mean, although at this point there is not enough supporting data because we have been publishing the list only since 2008,” the credit-rating firm says.
Moody’s said 27 companies, including auto-parts supplier American Axle & Manufacturing and retailer Neiman Marcus, cleared the debt deadbeats list in the third quarter, generally helped by stronger earnings and easier refinancing terms.
Thirteen companies, such as transportation firm Coach America Holdings and publisher Penton Business Media, were added to the list during the third quarter. (Another listee, Blockbuster Inc., is expected to file for bankruptcy any day now.)
The list includes companies Moody’s has slapped with a “probability of default” rating of B3 or lower, with a negative outlook or on review for a possible downgrade.
Companies added to the ratings list (13 in total)
AmerCable Inc.
American Casino & Ent. Properties LLC
Coach America Holdings Inc.
Dynegy Holdings Inc.
Edgen Murray II, L.P.
Gaylord Entertainment Co.
Geokinetics Holdings Inc.
L-1 Identity Solutions Inc.
Penton Business Media Holdings Inc.
RAAM Global Energy Co.
Reddy Ice Holdings Inc.
Symbion Inc.
USG Corp.
Companies off the ratings list (27)
American Axle & Manufacturing Holdings Inc.
American Safety Razor Co.
Apptis (DE) Inc.
ArvinMeritor Inc.
Atlas Pipeline Partners L.P.
Bankruptcy Management Solutions Inc.
Bellisio Foods Inc.
BioReliance Corp.
Blockbuster Inc.
Brown Jordan International Inc.
Cohr Holdings Inc.
Cristal Inorganic Chemicals Ltd.
Diagnostic Imaging Group LLC
Duane Reade Inc.
Educate Inc.
Mattress Holdings Corp.
Michaels Stores Inc.
The Neiman Marcus Group Inc.
Oriental Trading Co.
Panavision Inc.
Quiksilver Inc.
Shiloh Industries Inc.
Thermadyne Holdings Corp.
Trailer Bridge Inc.
Trilogy International Partners LLC
UAL Corp.
Unifrax LLC 1
