2010 worse for NZ defaults than 2009: S&P

Defaults by Australasian issuers remained stable last year, with only one missed payment by a confidentially rated company, carrying on the trend of a single default since 2006. That's 0.5% of the 434 issuers S&P rates across Australia and New Zealand. Still, this will not continue in 2010, with two short-term defaults by issuers not rated earlier in the year being reported already.

"It should be noted that the performance for 2009 should not create expectations for a continuation in 2010 of the pattern seen over the past four years," said S&P credit analyst Terry Chan. "The lag effect from New Zealand's downturn has seen two defaults in the first quarter 2010 of small financial institutions, a factor that automatically will break the pattern and which will be captured in our review of 2010."

There was a surge of companies applying for credit ratings earlier this year as Reserve Bank regulations approach, requiring non-bank deposit takers holding assets of more than $20 million to have a credit rating from S&P, Fitch Ratings, or Moody's Investor Services.

New Zealand and Australia fared well on a global comparison, with a record-high 264 defaults, or 3.99%, last year.