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When it comes to companies, the poor are getting a little less poor and that's good news for bond investors concerned about defaults.

The number of companies on the bottom end of Moody's Investors Service's bond-rating scale is down to its lowest point of the year as companies pay down debt. In fact, the list of companies rated B3 Negative and lower is down to about half the length it was during the credit crisis.

There are now 152 companies on the list, down from 179 at the beginning of the year, Moody's said in a report. For that reason, the ratings agency says look for the default rate on corporate bonds to drop to 2.5 per cent in June from 3.1 per cent now.

"The list has been predictive in the past, with its population surging before the last default-rate peak in 2009," Moody's said.

The list is shrinking in large part because companies are repairing their balance sheets and improving their credit ratings. For companies that are still on the list, default is not all that likely because there is plenty of appetite for debt from even companies with weak balance sheets, enabling them to refinance. Investors are so keen on high-yield bonds that they are still willing to lend.