By: Phil Froats
With the performance of the stock market over 2008, it appeared that the only way to make a small fortune was to start with a large one. Although interest-bearing investments are safer, there are still risks. A report entitled “Default and Recovery Rates of Canadian Corporate Issuers, 1989-2007” was published last year by Moody’s Credit Research. During this time period, there was a total of $46,368,400,000 in bond and loan defaults by 74 corporations. That works out to $1,467 per Canadian based on the 2006 census.
The telecommunications industry accounted for over $22 billion or 48% of the defaults. The restructuring of the wireless communications segment of this sector during 2001 and 2002 was a large contributor to the totals. Other industries that saw debt defaults in excess of $1 billion were Airlines, funeral services, manufacturing, paper & forest, real estate, transportation and waste management. Following are the companies that defaulted on over $1 billion in debt during the 1989-2007 time period.
AT&T Canada $5.6 billion
Laidlaw $5.1 billion
Teleglobe $5 billion
Call-Net Enterprises $3.4 billion
Loewen Group International $2.4 billion
360networks $2.2 billion
Philip Services $2 billion
360networksHolding USA $1.8 billion
GT Group Telecom $1.5 billion
Microcell Telecommunications $1.5 billion
Doman Industries $1.1 billion
One Response to “ DEBT DEFAULTS ”
We still haven’t seen too many corporate defaults yet (although I only use the CDS auctions to track it so maybe I’m missing a lot of them). I wonder how bad this year will be.
http://investskeptically.com/2009/01/07/credit-risk-status-update-on-recoveries/
By Thomas on Jan 7, 2009