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The final, sobering tally: $429 billion, seven times that of 2005-2007 combined.
Stephen Taub, CFO.com | US
February 10, 2009
Credit losses in 2008 exceeded those of the previous three years combined by more than seven times, according to a new report from Standard & Poor's.
Of the total $429.4 billion lost in 2008, bad loans by banks accounted for 54 percent, according to the credit ratings company. Lehman Brothers alone accounted for $144.4 billion of the losses, or about one-third of the total. But losses outside the banking sector soared too, from $8.5 billion in 2007 to $198.3 billion last year.
The second-hardest-hit sector was media and entertainment, which racked up "only" $32.6 billion in defaults. Next was the gaming and hotel sector, which S&P said was significant because, historically, gaming has been fairly recession-proof and few defaults were reported in 2006 and 2007.
Of the top 100 defaults for 2008, none was less than $100 million, and each of the 10 largest exceeded $10 billion, according to the report.
S&P noted that the number of defaults grew as last year progressed. Just five companies defaulted in January, but in December there were 26, bringing to 124 the number of companies that could not meet their debt obligations.
And yet, as far as economic downturns go, that number is relatively tame. S&P pointed out that in 2001 and 2002, 229 and 225 companies, respectively, defaulted. However, the dollar amounts were much lower.