Benign default conditions extended to short-term debt instruments in 2013. Fitch recorded an average 12 month default rate of 0.21% across the agency's global short-term ratings - in line with a similarly low default rate of 0.51% recorded across Fitch's universe of global corporate long-term ratings.
The share of corporate finance short-term ratings downgraded in 2013, 6.2%, was down from the prior year's 7.5%, but again exceeded the year's modest upgrade rate of 2.3%.
Fitch's short-term ratings distribution has shifted from a 60% concentration in the top rating categories -- 'F1+' and 'F1' -- in 2000 to 32% by year-end 2013. Pressure on the rating mix has come from three developments - broad based credit quality deterioration in the aftermath of the financial crisis, industrials strategically moving down the rating scale, and the growing presence of lower rated emerging market issuers in the mix.
For the fifth consecutive year, there were no short-term structured finance defaults in 2013. In addition, rating stability remained high, with the vast majority of ratings either remaining unchanged or paying in full for the year.
The study is titled 'Fitch Ratings Global Short-Term 2013 Transition and Default Update' and is available on Fitch's web site under
Additional information is available at www.fitchratings.com.
Source: Fitch Ratings
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