S&P/Experian Credit Default Indices Show Increases in Default Rates

NEW YORK, May 17, 2011 /PRNewswire/ -- Data through April 2011, released today by S&P Indices and Experian for the S&P/Experian Consumer Credit Default Indices, a comprehensive measure of changes in consumer credit defaults, showed an increase in bank card and second mortgages default rates for the first time in at least five months. Bank Card defaults went up from 5.59% in March to 5.91% in April and Second Mortgages increased from 1.42% to 1.51%.  First Mortgages experienced a fairy large decrease in default rates down to 2.16% from 2.33%, while Auto Loan had a small decrease to 1.45%.

"We had seen default rates fall across all major categories and most major cities during the prior six months, but given April's data that might be coming to end.  The real question is whether April was temporary or are household balance sheets worsening?" said David M. Blitzer, Managing Director and Chairman of the Index Committee for S&P Indices. "In addition, there are some significant differences across credit types and MSAs. Bank Card default rates went up in April, after having fallen each of the past 11 months; and the data indicate that the rate of default on credit cards is still 5.90%, more than twice any of the other loan classes.  We see a similar situation in the Miami Composite Index. While well below the 10.26% rate we saw for Miami in November 2010, that market is registering default rates of 5.40%. The other four MSAs we follow registered no higher than 2.60% in April.  Like most economic recoveries, while there will be general trends we do expect to see differences across loan classes and regions."

Consumer credit defaults varied across major cities and regions of the U.S. Among the five major Metropolitan Statistical Areas (MSAs) reported in this release each month, Los Angeles and New York lead the way with the largest decrease in defaults rates to 2.57% and 2.11%, from 2.73% and 2.26%, respectively. Chicago and Dallas followed not far behind with defaults decreasing to 2.48% and 1.56%.  Miami's default rates increase this month to 5.40% from 5.33%.

The table below summarizes the April 2011 results for the S&P/Experian Credit Default Indices. These data are not seasonally adjusted and are not subject to revision.

The table below provides the S&P/Experian Consumer Default Composite Indices for the five MSAs:

Jointly developed by Standard & Poor's and Experian, the S&P/Experian Consumer Credit Default Indices are published on the third Tuesday of each month at 9:00 am ET. They are constructed to accurately track the default experience of consumer balances in four key loan categories: auto, bankcard, first mortgage lien and second mortgage lien. The Indices are calculated based on data extracted from Experian's consumer credit database. This database is populated with individual consumer loan and payment data submitted by lenders to Experian every month. Experian's base of data contributors includes leading banks and mortgage companies, and covers approximately $11 trillion in outstanding loans sourced from 11,500 lenders.

For more information, please visit: www.consumercreditindices.standardandpoors.com.

About S&P Indices

S&P Indices, a part of McGraw-Hill Financial, is the world's leading index provider maintaining a wide variety of investable and benchmark indices. Over $1.25 trillion is directly indexed to Standard & Poor's family of indices, which includes the S&P 500, the world's most followed stock market index, the S&P/Case-Shiller Home Price Indices, the leading measure of U.S. home prices, the S&P Global BMI, an index with approximately 11,000 constituents, the S&P GSCI, the industry's most closely watched commodities index, and the S&P National AMT-Free Municipal Bond Index, the premier investable index for U.S. municipal bonds. For more information, please visit www.standardandpoors.com/indices.  

Standard & Poor's does not sponsor, endorse, sell or promote any S&P index-based investment product. The S&P/Experian Consumer Credit Default Indices are products of S&P Indices, which operates independently of Standard & Poor's Ratings Group. Standard & Poor's Ratings Group plays no role in the compilation, distribution or licensing of the Indices.

About Experian Capital Markets

Formed as a response to market needs, Experian Capital Markets leverages Experian's comprehensive U.S. consumer and business databases to provide data and analytics to serve the transparency needs of the structured finance market participants. By taking underlying borrower data and applying advanced analytics, Experian provides insight into U.S. consumer and business credit behavior across all obligations, helping to forecast future payment patterns on prepayments, delinquencies, charge-offs or defaults for non-agency residential mortgage-backed securities and other asset-backed securities.

About Experian

Experian is the leading global information services company, providing data and analytical tools to clients in more than 90 countries. The company helps businesses to manage credit risk, prevent fraud, target marketing offers and automate decision making. Experian also helps individuals to check their credit report and credit score and protect against identity theft.

Experian plc is listed on the London Stock Exchange (EXPN) and is a constituent of the FTSE 100 index. Total revenue for the year ended March 31, 2010, was $3.9 billion. Experian employs approximately 15,000 people in 40 countries and has its corporate headquarters in Dublin, Ireland, with operational headquarters in Nottingham, UK; Costa Mesa, California; and Sao Paulo, Brazil.

For more information, visit http://www.experianplc.com.

Experian and the marks used herein are service marks or registered trademarks of Experian Information Solutions, Inc. Other product and company names mentioned herein may be the trademarks of their respective owners.

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