Kamakura Troubled Company Index Shows Further Decline

Kamakura Corporation reported Tuesday that its monthly index of troubled public companies indicated still another steep decline in global corporate credit quality in August. The Kamakura index has now shown declines in credit quality in 12 of the last 13 months. Kamakura's index revealed that troubled companies in August make up 14.8% of the global public company universe, up significantly from 13.9% in July. The 14.8% value for the Kamakura index is the highest since June 2003. At the August level, the index shows that credit conditions are better than only 34.4% of the monthly periods since the start of the index in January 1990. The all-time high in the index was 28.0%, reached in September 2001, and the all-time low was 5.4%, recorded in April and May 2006. Kamakura defines a troubled company as a company whose short term default probability is in excess of 1%. The index covers more than 20,000 public companies in 30 countries using the fourth generation version of Kamakura's advanced credit models.