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Risk of Defaults in Distressed Debt Is Climbing, S&P Says

Risks of default in speculative-grade debt markets are increasing as companies seek more capital, according to Standard & Poor’s.

The U.S. distress ratio, a measure of the level of risk the market has priced into bonds, rose to 5.4 percent on Aug. 15, from 4.9 percent a month earlier, according to a report today from analysts at S&P led by Diane Vazza, head of global fixed income research. The ratio has climbed from a three-year low of 4.7 percent in May.