Bangkok--1 Oct--Standard & Poor's
Uncertainty about the European sovereign debt crisis and disappointing economic data from the developed world weakened investor sentiment last month, said an article published today, titled "U.S. Distressed Debt Monitor."
Investors' limited appetite for risk led to very low new issuance levels and kept the speculative-grade spread above 700 basis points (bps). "The U.S. corporate speculative-grade bond spread widened to 727 bps on Sept. 15 from 694 bps on Aug. 15," said Diane Vazza, head of Standard & Poor's Global Fixed Income Research. "The distress ratio increased to 14.9% on Sept. 15 from 13.2% a month earlier."
Standard & Poor's distress ratio is the number of distressed securities divided by the total number of speculative-grade-rated issues. Distressed credits are speculative-grade-rated issues that have option-adjusted spreads of more than 1,000 bps relative to Treasuries.
"The size of the corporate distressed universe increased significantly in September. A total of 162 companies had issues trading with spreads of 1,000 bps and higher as of Sept. 15, up from 139 companies in August," said Ms. Vazza. "The last time we saw such a high level was in October 2009, when 151 companies had distressed issues. Along with this, the count of affected issues spiked to 227 from 204."
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Media Contact:
Mimi Barker, New York (1) 212-438-5054,
[email protected]
Analyst Contacts:
Diane Vazza, New York (1) 212-438-2760