September produced a single default, the bankruptcy filing by paper company NewPage Corporation (NewPage), affecting $3.2 billion in bonds. With NewPage, the year-to-date default tally moved up to $7.9 billion and the trailing 12-month default rate to 1.4%. Similar to 2010, 2011 U.S. defaults have come overwhelmingly from the bottom of the rating scale, with nearly all defaulted issues rated 'CCC' or lower at the start of the year.In the face of fears that the U.S. economy may slip into another recession, Fitch's new report examines key market metrics and important contrasts that separate current default conditions from the September 2008 period.'Variables ranging from fundamental trends to funding to the market's rating mix all point to greater resiliency in the event of another downturn', said Mariarosa Verde, Managing Director of Fitch Credit Market Research. 'However, the depth of any potential recession would ultimately determine the severity of a new surge in defaults.'The weighted average recovery rate on defaults through September was a robust 56% of par (since 2000, the average annual recovery rate according to Fitch's U.S. High Yield Default Index is 35% of par).'When combining default and recovery rates, the loss rate on 2011 defaults remains very low -- less than half a percent on a year-to-date basis,' said Eric Rosenthal, Senior Director of Fitch Credit Market Research. 'In addition, 2011's defaulted issues were already trading at a discounted weighted average price of 72.2% of par at the beginning of the year.'Fitch's report also discusses default and recovery patterns associated with grace period defaults.The monthly series offers a detailed view of default and recovery rates by industry and seniority, a look at the market's evolving profile, issuance and credit availability indicators.

September produced a single default, the bankruptcy filing by paper company NewPage Corporation (NewPage), affecting $3.2 billion in bonds. With NewPage, the year-to-date default tally moved up to $7.9 billion and the trailing 12-month default rate to 1.4%. Similar to 2010, 2011 U.S. defaults have come overwhelmingly from the bottom of the rating scale, with nearly all defaulted issues rated 'CCC' or lower at the start of the year.In the face of fears that the U.S. economy may slip into another recession, Fitch's new report examines key market metrics and important contrasts that separate current default conditions from the September 2008 period.'Variables ranging from fundamental trends to funding to the market's rating mix all point to greater resiliency in the event of another downturn', said Mariarosa Verde, Managing Director of Fitch Credit Market Research. 'However, the depth of any potential recession would ultimately determine the severity of a new surge in defaults.'The weighted average recovery rate on defaults through September was a robust 56% of par (since 2000, the average annual recovery rate according to Fitch's U.S. High Yield Default Index is 35% of par).'When combining default and recovery rates, the loss rate on 2011 defaults remains very low -- less than half a percent on a year-to-date basis,' said Eric Rosenthal, Senior Director of Fitch Credit Market Research. 'In addition, 2011's defaulted issues were already trading at a discounted weighted average price of 72.2% of par at the beginning of the year.'Fitch's report also discusses default and recovery patterns associated with grace period defaults.The monthly series offers a detailed view of default and recovery rates by industry and seniority, a look at the market's evolving profile, issuance and credit availability indicators.