Bangkok--28 Jul--Standard & Poor's Ratings Services
Standard & Poor's Ratings Services has published a report examining the uncertainty in the U.S. corporate bond market.
"The past six weeks have been fairly volatile for the U.S. corporate bond market, with riskier segments coming under heavier pressure," said Diane Vazza, head of Standard & Poor's Global Fixed Income Research Group. "Yields and spreads have been tossing and turning on higher core inflation and geopolitical concerns. Temporary aberrations notwithstanding, we detect enough early warning signals in corporate credit metrics to continue our cautionary corporate credit stance, particularly for the high-yield segment."
The article, titled "Outlook For U.S. Corporate Bonds: Uncertain Times," says that a series of ugly core CPI inflation readings have raised inflation concerns and with central banks across the globe aiming to mop up excess liquidity, the standard prognosis holds: economic growth should slow, dragging down profits and credit quality, thus exposing the deficiencies of the weakest issuers and elevating default rates. Such gradual erosion in credit fundamentals is coming off a strong base. However, we expect that repeated volatility episodes will continue to dent bond market psyche, pushing spreads wider for riskier credits to more balanced tradeoff levels.
The report is available to subscribers of RatingsDirect, Standard & Poor's Web-based credit research and analysis system, at www.ratingsdirect.com . If you are not a RatingsDirect subscriber, you may purchase a copy of the report by calling (1) 212-438-9823 or sending an e-mail to [email protected] . The report is also available at www.sandp.com/gfir , listed under Global Fixed Income Research. If you have not previously registered with the site, you will need to do so to access this material. Registration requires minimal information and is free. Members of the media may request a copy of this report by contacting the media representative name provided.
Media Contact:
Mimi Barker, New York (1) 212-438-5054, [email protected]
Analyst Contacts:
Diane Vazza, New York (1) 212-438-2760
Standard & Poor's, a division of The McGraw-Hill Companies (NYSE:MHP), is the world's foremost provider of financial market intelligence, including independent credit ratings, indices, risk evaluation, investment research and data. With approximately 7,500 employees, including wholly owned affiliates, located in 21 countries. Standard & Poor's is an essential part of the world's financial infrastructure and has played a leading role for more than 140 years in providing investors with the independent benchmarks they need to feel more confident about their investment and financial decisions. For more information, visit http://www.standardandpoors.com .
Key Contacts:
Americas Media Relations: (1) 212-438-6667
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