Bangkok--13 Jun--Standard & Poor's
Standard & Poor's Global Fixed Income Research has published its latest Stress In Corporate America report, in which we use three of our preexisting research publications to identify and spotlight U.S. sectors we believe are currently subject to the highest levels of credit stress.
"In light of sluggish consumer demand and some uncertainty about economic and credit market conditions, the media and entertainment, oil and gas, and retail and restaurants sectors were, in our opinion, the most troubled sectors as of May 25, 2011," said Diane Vazza, head of Standard & Poor's Global Fixed Income Research.
These sectors had the highest levels of risk among our lists of distressed companies (defined as speculative-grade companies with securities trading in excess of 1,000 basis points above U.S. Treasuries), weakest links (companies rated 'B-' or lower with negative outlooks or ratings on CreditWatch with negative implications), and potential bond downgrades (investment-grade or speculative-grade companies with negative outlooks or ratings on CreditWatch negative).
We identified 81 companies in these three sectors that meet at least one of the criteria described above, according to the article, titled "Stress In Corporate America: Despite Improvements, Potential Problems Remain For The Stressed Sectors In 2011." Of the 81 companies that we identified, 23 are on more than one list, indicating even higher vulnerability.
With new job creation stalling and the unemployment rate gradually rising in May, pessimism about the economic recovery has increased recently. The Federal Reserve reported that industrial production was flat in April, and manufacturing output dipped 0.4% from the previous month. In March, the U.S. trade deficit was $48.2 billion, up 6% from $45.4 billion in February, largely because of surging oil prices. If these factors continue to deteriorate in the next few months, we expect that lending conditions for corporate borrowers will weaken.
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