Capital IQ On Sovereign and Sector Credit Defaults
S&P Capital IQ released a note Wednesday morning on default probabilities in the Ukraine and Russia.
No surprise that Ukraine has a very high probability while Russia also remains elevated as questions regarding implementation of Russian law in Russia create cause for concern along with the slow modernization of their economy and the heavy slant the country has towards favoring the energy sector.
Speaking to the specifics of Sector credit in the US, S&P calls out GameStop (NYSE: GME) for being the constituent in the Consumer Discretionary sector with the largest probability of default (PD) at 1.14 percent.
Speaking to the breakdown in the telecom sector, S&P said, "Telecommunication Services'...saw a deterioration to 0.19% from the 0.12% PD level reported in February. The heaviest single constituent in this sector once more being Frontier Communications at 1.02% PD."
Wrapping up with specific company PD rates S&P highlights JC Penney (NYSE: JCP) with a default probability of 9.07% and the likes of MGM Resorts (NYSE: MGM) with 0.87% PD and Carnival Corp (NYSE: CCL) with a 0.33% probability of default.
With the FED winding down QE, market participants will begin monitoring individual firm credit worthiness much more closely.
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