Risk of credit defaultsdecreasing

For many investors in the sterling corporate bond market, 2002 was an annus horribilis. Along with corporate bond markets globally, the sector experienced an unprecedented number of disasters. The worst case scenario for corporate bond investors is that a company defaults on its obligations to bondholders, failing to pay interest due and ultimately reneging on the capital repayment. In 2002 there were a number of examples of this globally. According to the credit rating agency Standard and Poor's, the proportion of issuers defaulting last year was the highest since 1991. In addi...