Bangkok--5 Aug--Standard & Poor's
The number of global entities that are most at risk of downgrades remains unchanged since our last report, at 451 as of July 27, said an article published today by Standard & Poor's Global Fixed Income Research, titled "Global Potential Downgrades: Downgrade Risk Remains Stable As All Eyes Are On Sovereigns."
The total remains far below its peak of 1,028 in April 2009. Ratings across most sectors appear more stable now than they have historically, though a few sectors, including sovereigns, show higher downgrade risk.
Potential downgrades are entities that have either negative outlooks or ratings on CreditWatch with negative implications across rating categories 'AAA' to 'B-'.
Standard & Poor's Ratings Services has downgraded 13 entities that were on the potential downgrades list last month. Of these, four remain on the list with negative outlooks or ratings on CreditWatch with negative implications.
"Sovereign issuers account for 5% of the potential downgrades. Sixteen of these 22 sovereign issuers on the list are based in Europe and Eastern Europe/Middle East/Africa," said Diane Vazza, head of Standard & Poor's Global Fixed Income Research.
"Through the first half of 2011, 94% of the downgraded debt volume ($9.4 trillion) was attributed to rating actions taken on sovereign issuers and on corporate issuers based in countries that have been downgraded," said Ms. Vazza.
In our view, 17 of the 21 sectors show lower downgrade risk than they have historically. When we measured the gap between the current negative bias and the historical averages, we found that credit conditions in most sectors are less negative than they have been historically. Negative bias is the proportion of issuers with negative outlooks or ratings on CreditWatch with negative implications to the total number of rated issuers.
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 Contact:
Diane Vazza, New York (1) 212-438-2760