Bangkok--9 Nov--Standard & Poor's
According to a report published today by Standard & Poor's, in light of the sluggish consumer demand and uncertainty about economic and credit market conditions, the media and entertainment, oil and gas, and high technology sectors were the most troubled sectors as of Oct. 31, 2010.
The report, titled "Stress In Corporate America (Premium)," is part of a monthly series that identifies and spotlights U.S. sectors that Standard & Poor's believes are currently subject to the highest levels of credit stress.
"The media and entertainment, oil and gas, and high-tech sectors consistently had the highest levels of risk among our lists of distressed companies, weakest links, and potential bond downgrades," said Diane Vazza, head of Standard & Poor's Global Fixed Income Research. "We identified 119 companies in these three sectors that are on at least one of these lists."
Key points to emerge from this month's sector stress report:
- After a positive start in 2010, the U.S. economic recovery appears to be hitting some headwinds.
- Of the 119 companies in these three sectors (media and entertainment, oil and gas, and high technology), 26 are on more than one list, indicating even higher vulnerability. Two companies are featured on all three lists.
- In line with the broader nonfinancial universe, these sectors' rating mix has the greatest concentration in the 'B' rating category, which includes 'B+', 'B', and 'B-'.
- The ranks of the lowest-rated companies (i.e., 'B-' or lower) are significantly larger for the media and entertainment sector as a share of total speculative-grade ratings than the 19.7% for nonfinancials overall.
- Over the past 12 months, 50% of all rating actions in media and entertainment and 51.4% of rating actions in oil and gas were downgrades.
This article is part of our premium Global Fixed Income Research content, which is available to premium subscribers to RatingsDirect on the Global Credit Portal atwww.globalcreditportal.com and to RatingsDirect at www.ratingsdirect.com. Ratings information can also be found on Standard & Poor's public Web site by using the Ratings search box located in the left column at www.standardandpoors.com. Members of the media may request a copy of this report by contacting the media representative provided.
Media Contact:
Mimi Barker, New York (1) 212-438-5054,
[email protected]
Analyst Contact:
Diane Vazza, New York (1) 212-438-2760