Bangkok--14 Sep--Standard & Poor's
Standard & Poor's Global Fixed Income Research has published its most recent "Stress In Corporate America" report, in which we use three of our 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 continued uncertainty about economic and credit market conditions, the media and entertainment, oil and gas, and consumer products sectors were, in our opinion, the most troubled sectors as of Sept. 5, 2011, according to the article published today, titled "Stress In Corporate America: A Slow Recovery For The Three Most Stressed Sectors." These sectors had the highest levels of risk among our lists of distressed companies (speculative-grade companies with securities trading in excess of 1,000 basis points, or bps, 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 113 companies in these three sectors that meet at least one of the criteria described above.
"The three most stressed sectors account for some of the largest contributions to negative bias in the speculative-grade segment," said Diane Vazza, head of Standard & Poor's Global Fixed Income Research. "Media and entertainment leads with 15% of the total, followed by consumer products at 8% and oil and gas at 7%." However, current negative bias levels are lower than the long-term averages in all three sectors. We define negative bias as the proportion of entities with either negative outlooks or ratings on CreditWatch with negative implications.
"As of Aug. 17, the three stressed sectors accounted for about 37% of the issuers listed as weakest links and four of the 18 total defaulters across all sectors in 2011," said Ms. Vazza. We define weakest links as issuers rated 'B-' or lower with either negative outlooks or ratings on CreditWatch with negative implications. These entities are at greater risk of default.
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