"The current Bottom Rung list provides ample evidence of a severe default cycle," Moody's said in a statement. "More than 23 percent of all U.S. speculative-grade companies are on the list, compared with 9 percent two years ago."This month, Moody's dropped Spansion from its Bottom Rung list as the firm filed for Chapter 11 bankruptcy reorganization.
While companies on the "Bottom Rung" ranking have not defaulted on their loan obligations, Moody's said their current weak financial conditions make this a possible development especially if the economy continues to weaken.
Moody's said it will update the "Bottom Rung" listing every month. Some companies are likely to drop off the ranking by receiving an upgrade to their credit rating or by defaulting on their loan obligations.
AMD ends up on Moody's Bottom Rung list
Posted on Wednesday, Mar 11 2009 @ 20:06 CET by Thomas De Maesschalck