Corporate bond defaults have soared to record levels, with 196 issuers - including one in Bermuda - defaulting on approximately $107 billion of debt through December 7, 2001, according to Standard & Poor's.

The previous record of 117 issuers defaulting on US $42.3 billion of debt was set for all of 2000.

"The absolute number and dollar amount of defaults are unprecedented, and default rates-the percentage of issuers defaulting, are approaching 1991 record levels when the economy also was in recession," said Brooks Brady, author of the study for Standard & Poor's Risk Solutions.

"The default rate for all issuers currently stands at 3.71 percent, which is the highest level since 1991 when 3.96 percent of all issuers defaulted. Of the high-yield issuers 8.92 percent defaulted and 0.60 percent of investment-grade issuers have defaulted this year. These are the highest rates since 1991 when 12.73 percent of high yield issuers and 0.81 percent of investment-grade issuers defaulted."

"Investment-grade defaults through December totalled 20, the largest we have ever recorded," Brady said. "To put this number in perspective, there were 13 investment-grade defaults in 1991."

While these are preliminary figures, they will almost certainly increase by the end of the calendar year. Default statistics for 2001 will be finalised and published in more detail in early 2002.

Totals through December 7, 2001, are as follows: 156 defaults have occurred in the US, followed by Argentina with 11, Canada with nine, the UK with five, and Australia with three. One default each has taken place in Bermuda, Germany, Greece, Indonesia, Korea, Mexico, the Netherlands, Norway, the Philippines, Poland, Russia, and Thailand.

Default, transition, and recovery research is produced by Standard & Poor's Risk Solutions, the customised credit risk services arm of Standard & Poor's.