Kamakura Reports Worldwide Corporate Credit Quality Improves To 84th Percentile 1990-2017

Kamakura Corporation reported Monday that the Kamakura troubled company index ended September at 7.77%, a decrease of 0.07% from the prior month. The index reflects the percentage of the Kamakura 39,000 public firm universe that has a default probability over 1.00%. An increase in the index reflects declining credit quality while a decrease reflects improving credit quality.

As of the end of September, the percentage of the global corporate universe with default probabilities between 1% and 5% was 6.41%, a decrease of 0.09% from the end of August; the percentage of the universe with default probabilities between 5% and 10% was 1.01%, an increase of 0.09% from the prior month end; the percentage between 10% and 20% was 0.27%, down 0.08%; while the percentage of companies with default probabilities over 20% was 0.08%, up 0.01%. The index ranged from the low of 7.77% on September 29 to 8.14% on September 8. Volatility was down significantly from the previous month.

At 7.77%, the troubled company index strengthened to the 84th percentile of historical credit quality (with 100 being best all time) over the period from January 1990 to the present. Among the 10 riskiest rated firms in September, six were from the United States, two from Great Britain and one each from Australia and Singapore. During the month, there were seven defaults in the coverage universe. Boart Longyear LTD (OTCPK:BOARF) became the riskiest rated firm with a one-year KDP of 20.31%, up 10.70% over the past month. Boart Longyear Ltd. is a global mineral exploration firm with a long and interesting history. The firm was sold to Macquarie Bank in October 2006 and was taken public in an initial public offering on the ASX stock exchange in 2007. It is still headquartered in Salt Lake City and private equity maintains majority ownership. The firm is going through an interesting restructuring being supervised by the New South Wales Court of Appeal. The global law firm Hogen Lovell has an excellent…

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