Defaults and Returns on High Yield Bonds: Analysis Through September 30, 2002

The third-quarter 2002 default rate for high yield bonds was 4.95%, based on $37.48 billion of defaults. The quarterly default rate is the highest in history, surpassing the first quarter of 1991 rate of 4.80$28.30 billion of defaults (76%). Without WorldCom, the third quarter default rate would have only been 1.2%. The dollar weighted default rate for the first three quarters has already broken the record for a single calendar year reaching 10.98%. And, the latest four-quarters’ default rate of 15.01% has also set a record. Again, WorldCom’s huge default contributed about 4% of this record total. The persistently high default rate through the third quarter has resulted in a near record yield spread of 10.10% -- second only to 1990’s 10.50%. The current yield spread is more than 5% above the historical average. We believe the default rate has peaked in Q3-2002 and depending on the size of the decline, we believe the huge yield spread could reflect an over-sold market. Counting WorldCom ($46.0 billion in liabilities), there were more than$197 billion in liabilities of firms which filed for Chapter 11 protection through the third quarter and 26 firms had liabilities greater than $1 billion. The count was 22 firms through the first-half of the year, so the third-quarter number was "only" four, including WorldCom. There were 39 of such firms in 2001 - - a record year

Defaults & Returns on High Yield Bonds: Analysis Through September 30, 2002

The third-quarter 2002 default rate for high yield bonds was 4.95%, based on $37.48 billion of defaults. The quarterly default rate is the highest in history, surpassing the first quarter of 1991 rate of 4.80$28.30 billion of defaults (76%). Without WorldCom, the third quarter default rate would have only been 1.2%. The dollar weighted default rate for the first three quarters has already broken the record for a single calendar year reaching 10.98%. And, the latest four-quarters’ default rate of 15.01% has also set a record. Again, WorldCom’s huge default contributed about 4% of this record total. The persistently high default rate through the third quarter has resulted in a near record yield spread of 10.10% -- second only to 1990’s 10.50%. The current yield spread is more than 5% above the historical average. We believe the default rate has peaked in Q3-2002 and depending on the size of the decline, we believe the huge yield spread could reflect an over-sold market. Counting WorldCom ($46.0 billion in liabilities), there were more than$197 billion in liabilities of firms which filed for Chapter 11 protection through the third quarter and 26 firms had liabilities greater than $1 billion. The count was 22 firms through the first-half of the year, so the third-quarter number was "only" four, including WorldCom. There were 39 of such firms in 2001 -- a record year

Defaults and Returns on High Yield Bonds: The Year 2002 in Review and the Market Outlook

The year 2002 was remarkably difficult on many fronts for most financial markets. For the high yield bond market, it was again a year of record amounts of defaults which contributed to low recovery rates and slightly negative absolute returns. The default rate registered a massive 12.8%, based on $757 billion outstanding. Despite these record default totals and rates, the market’s decline was orderly with little panic and actually ended the year with reduced defaults and highly positive returns in the fourth quarter. Default amounts registered its fourth consecutive record year and almost topped$100 billion ($97.9 billion) for the first time. This total was more than 52 This report documents and comments upon the high yield bond market’s risk and return performance over the period 1971-2002. We will present traditional, dollar-denominated default rates as well as our own mortality rate statistics. Default rate analysis will be complemented by discussion on corporate bankruptcies and the immense impact of fallen angels on the high yield market. We conclude with our annual estimate of the size of the distressed debt market and our forecast for defaults in 2003. Our analysis will include an update on our default recovery forecasting model which was extremely accurate in estimating 2002’s recovery rate of about 25 Based on the fourth quarter’s reduction in default rate to 1.82 In 2002, there was$65.6 billion in new high yield bond issuance, down from 2001’s $88.2 billion. We expect new issuance in 2003 to escalate unless the economic/political scene motivates another flight to quality in our financial markets

Defaults & Returns on High Yield Bonds: Analysis Through September 30, 2002

The third-quarter 2002 default rate for high yield bonds was 4.95%, based on $37.48 billion of defaults. The quarterly default rate is the highest in history, surpassing the first quarter of 1991 rate of 4.80$28.30 billion of defaults (76%). Without WorldCom, the third quarter default rate would have only been 1.2%. The dollar weighted default rate for the first three quarters has already broken the record for a single calendar year reaching 10.98%. And, the latest four-quarters’ default rate of 15.01% has also set a record. Again, WorldCom’s huge default contributed about 4% of this record total. The persistently high default rate through the third quarter has resulted in a near record yield spread of 10.10% -- second only to 1990’s 10.50%. The current yield spread is more than 5% above the historical average. We believe the default rate has peaked in Q3-2002 and depending on the size of the decline, we believe the huge yield spread could reflect an over-sold market. Counting WorldCom ($46.0 billion in liabilities), there were more than$197 billion in liabilities of firms which filed for Chapter 11 protection through the third quarter and 26 firms had liabilities greater than $1 billion. The count was 22 firms through the first-half of the year, so the third-quarter number was "only" four, including WorldCom. There were 39 of such firms in 2001 -- a record year

Defaults and Returns on High Yield Bonds: Analysis Through September 30, 2002

The third-quarter 2002 default rate for high yield bonds was 4.95%, based on $37.48 billion of defaults. The quarterly default rate is the highest in history, surpassing the first quarter of 1991 rate of 4.80$28.30 billion of defaults (76%). Without WorldCom, the third quarter default rate would have only been 1.2%. The dollar weighted default rate for the first three quarters has already broken the record for a single calendar year reaching 10.98%. And, the latest four-quarters’ default rate of 15.01% has also set a record. Again, WorldCom’s huge default contributed about 4% of this record total. The persistently high default rate through the third quarter has resulted in a near record yield spread of 10.10% -- second only to 1990’s 10.50%. The current yield spread is more than 5% above the historical average. We believe the default rate has peaked in Q3-2002 and depending on the size of the decline, we believe the huge yield spread could reflect an over-sold market. Counting WorldCom ($46.0 billion in liabilities), there were more than$197 billion in liabilities of firms which filed for Chapter 11 protection through the third quarter and 26 firms had liabilities greater than $1 billion. The count was 22 firms through the first-half of the year, so the third-quarter number was "only" four, including WorldCom. There were 39 of such firms in 2001 - - a record year

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Not AvailableIn this study, an RNA transfection was used to rescue infectious foot-and-mouth disease (FMD) virus from clinical samples in BHK-21 cell line for diagnosis of FMD. Tissue samples (n = 190) were subjected to FMD virus isolation by conventional cell culture and also by RNA transfection. FMD virus was isolated from 62% of the clinical samples by RNA transfection, whereas virus was isolated only from 16% of the clinical samples in conventional cell culture method, suggesting better performance of the RNA transfection. Virus was rescued from 67% and 10% of ELISA negative but multiplex PCR positive samples by RNA transfection and conventional cell culture, respectively. The efficiency of transfection was studied on clinical samples subjected to temperature as high as 37 °C and varying pH (pH 4–9). Except up to 1 week of storage at 4 °C at pH 7.5, virus isolation was not possible by cell culture. Virus was rescued by transfection from samples stored at 4 °C for any of the applied pH up to 4 weeks, and when stored at 37 °C virus could be rescued up to 4 weeks at pH 7.5 suggesting the fitness of transfection to isolate virus from clinical samples stored under inappropriate conditions. The sequence data and antigenic relationships with the vaccine strains, between virus rescued by transfection and conventional cell culture, were comparable. The RNA transfection will help to increase the efficiency of virus isolation, diagnosis and molecular epidemiological studies.Not Availabl