Bangkok--10 May--Standard & Poor's
The number of entities globally that are most at risk of downgrades has increased following the outlook revisions on the United States and Japan to negative. The count of potential downgrades rose by seven since our previous report to 457 as of April 26, said an article published today by Standard & Poor's Global Fixed Income Research, titled "Global Potential Downgrades: An Increase Globally Following The Outlook Revisions To Negative For The U.S. And Japan."
"The total remains far below its peak of 1,028 in April 2009, but this month marks the first increase in the number of potential downgrades in two years," said Diane Vazza, head of Standard & Poor's Global Fixed Income Research. "As we noted last month, sovereign rating actions continue to have the greatest impact on potential downgrades. Economic turmoil in Europe and social unrest in the Middle East and Africa have contributed significantly to the number of issuers added to the list of potential downgrades so far this year."
This month, sovereign issues remain a key factor affecting the number of potential downgrades. Standard & Poor's Ratings Services revised its outlooks on the U.S. and Japan to negative and, as a result, revised its outlooks on several companies in these two countries. Despite these developments, ratings across most sectors appear more stable now than they have historically.
Potential downgrades are entities that have either negative outlooks or ratings on CreditWatch with negative implications across rating categories 'AAA' to 'B-'.
Of the entities that we added to the potential downgrades list, 36 (or 67%) are from either the U.S. or Japan, and 16 were placed on the list following the U.S. and Japan outlook revisions.
Of the entities currently on the potential downgrades list, 21 are sovereigns and 16 of these are in either Europe or the Middle East/Africa.
In our view, 17 of the 21 sectors show lower downgrade risk than they have historically. This is an increase of one from last month.
The report is available to subscribers of RatingsDirect on the Global Credit Portal at www.globalcreditportal.com. If you are not a RatingsDirect subscriber, you may purchase a copy of the report by calling (1) 212-438-7280 or sending an e-mail to
[email protected]. 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 Contacts:
Diane Vazza, New York (1) 212-438-2760