The economic downturn is taking its toll on corporate America, as the default rate has taken off like a rocket this year, nearly tripling since January, according to Standard and Poor's.
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The ratings agency said Monday that 85 companies have defaulted in their
debt payments through Nov. 11, impacting $284 billion. The
steep rise compares with the historically low levels of only 22
defaults for all of 2007 and 30 in 2006.
U.S. companies were slammed the hardest, accounting for 70 of the
defaults. The remaining occurred around the globe, with five in Europe, four in
Asia, three in Canada, two in Mexico and one in Russia. Unfortunately,
S&P expects things to get even worse, with the U.S. default rate
hitting an average 7.6% over the next 12 months, which would entail
another 125 issuers defaulting on their debt. -
George White
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