Bangkok--4 Nov--Standard & Poor's
The number of global issuers poised for downgrades has declined to 532. This is slightly more than half the 1,028 issuers a year ago, said an article published today by Standard & Poor's Global Fixed Income Research, titled "Downgrade Potential Across Credit Grades And Sectors (Premium)."
Much of this decline has resulted from global economies and markets that are more supportive of stable--though weak--credit quality than they were a year ago. Also, Standard & Poor's Ratings Services has incorporated new information regarding the impact of the Gulf oil crisis into its ratings and outlooks on oil-related issuers. This led to Standard & Poor's revising its outlooks on a significant number of companies in the sector to stable from negative.
Potential downgrades are entities that have either a negative outlook or ratings on CreditWatch with negative implications across rating categories 'AAA' to 'B-'.
"The current tally of 532 issuers poised for downgrades is down from 564 this past month and is the lowest since our series began in September 2005," said Diane Vazza, head of Standard & Poor's Global Fixed Income Research.
The auto sector saw the largest change in negative bias this month--it narrowed by more than 7%. Finance companies followed with a 5% decline in negative bias this month. (Negative bias is the proportion of issuers with a negative outlook or ratings on CreditWatch negative to the total number of rated issuers.)
"When measured by the gap between the current negative bias and historical averages, finance companies, integrated oil and gas, and banks show more substantial downgrade risk than their peers," said Ms. Vazza. "On the other hand, high technology, retail and restaurants, telecommunications, and consumer products show less downgrade risk than their peers."
For subscribers who have access to the Global Credit Portal, click here for the article "Downgrade Potential Across Credit Grades And Sectors." For subscribers who have access to premium Global Fixed Income Research content, find the article here "Downgrade Potential Across Credit Grades And Sectors (Premium)." For more information or data inquiries, please call Client Services at 1-877-772-5436.
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Analyst Contacts:
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