FINNEWS LATAM-Latin America corporate defaults hit four-year high, Moody's says

The default rate for speculative-grade Latin American companies rose to 4.2 percent in the 12 months through July 2013, the highest level for the indicator since June 2010, when it stood at 4.4 percent, Moody's Investors Service said on Tuesday. According to the ratings company, modest regional and global economic growth will present challenges for Latin American issuers amid modest economic activity. The forecast for the region's speculative-grade default rate in the next 12 months is 3.3 percent, compared with 2.5 percent for global corporates. Seven companies - two from Brazil and five from Mexico - fell behind on their payments during the period, Moody's said. The default by Brazil-based Banco Cruzeiro do Sul SA was the largest corporate default by volume in the region since 2002.Other notable defaults in the past year were those afflicting the Mexican homebuilding industry. Over the past year, rating downgrades have been more numerous than upgrades in Latin America, according to Moody's. For methodological purposes, Moody's rated the debt of 336 companies in 21 Latin American countries by the end of July 2013, a 10 percent increase during the year. The majority of new issuers were based in Brazil and Peru.

This article is taken from Reuters.com