S&P/Experian Indices Show Continuing Decline in Default Rates

NEW YORK — Data through October 2010, released today by Standard & Poor’s and Experian for the S&P/Experian Consumer Credit Default Indices, a comprehensive measure of changes in consumer credit defaults, showed a decline in monthly default rates for all credit lines. First mortgage and auto loans declined in October to 2.91% and 1.92% respectively. Bank cards decreased slightly from 7.04% in September to 6.91% in October. Second mortgages had the largest decline in defaults this month, down 16.28%.

“Consumer credit default rates continued their decline across all major credit sectors and among all of the cities reported here.  Bringing default incidence down to more normal levels is key step to increased credit use and further improvements in the economy.  However, overall credit use through September, as reported by the Federal Reserve, shows that consumers are still reining in their borrowing,” says David M. Blitzer, Managing Director and Chairman of the Index Committee for Standard & Poor’s.  ”The report is encouraging – declining consumer defaults should help restore confidence and spending as we enter the holiday season.”

Consumer credit defaults varied across major cities and regions of the U.S. Among the five major Metropolitan Statistical Areas reported each month in this release, New York had the largest monthly decrease in defaults, 12.51%, followed by Los Angeles which declined by 8.49%. Miami and Chicago experienced similar declines of 7.47% and 7.85% respectively. Dallas declined slightly month over month, by 0.51%.

The table gives summary results for October 2010 for the S&P/Experian Credit Default Indices. These data are not seasonally adjusted and are not subject to revision.

The second table provides the S&P/Experian Consumer Default Composite Indices for five selected metropolitan statistical areas:

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, the world’s leading index provider, maintains a wide variety of investable and benchmark indices to meet an array of investor needs. Over $1 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 Global 1200, a composite index comprised of seven regional and country headline indices, the S&P Global BMI, an index with approximately 11,000 constituents, and the S&P GSCI, the industry’s most closely watched commodities index.  For more information, please visit www.standardandpoors.com/indices.

About Standard & Poor’s
Standard & Poor’s, a subsidiary of The McGraw-Hill Companies (NYSE: MHP), is the world’s foremost provider of independent credit ratings, indices, risk evaluation, investment research and data. With offices in 23 countries and markets, Standard & Poor’s is an essential part of the world’s financial infrastructure and has played a leading role for 150 years in providing investors with the independent benchmarks they need to feel more confident about their investment and financial decisions. For more information, visit http://www.standardandpoors.com.

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 65 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, 2009, 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.