Bangkok--15 Aug--Standard & Poor's
The number of fallen angels--issuers that were downgraded to speculative grade from investment grade--has increased sharply in the last month, according to a report released today by Standard & Poor's Ratings Services. The article, titled "Global Potential Fallen Angel Report," states that there were 32 fallen angels recorded through Aug. 11, 2006, on rated debt worth US$39 (?30.3) billion. This is an increase of seven from last month's report, of which four were based in the U.S.
Of the seven fallen-angel additions this month, three were attributed to merger and acquisition activity. In addition, 42 entities globally are at risk of becoming fallen angels, with rated debt totaling US$72.6 (?56.5) billion. This is two more than last month but five fewer than in July 2005.
"Fallen angels have overtaken rising stars by a margin of 11 entities in the year to date, a reversal of the pattern seen in full years 2004 and 2005," observed Diane Vazza, Managing Director and head of Standard & Poor's Global Fixed Income Research.
The sectors most vulnerable to generating fallen angels by count are media and entertainment, oil and gas exploration and production, utilities, and insurance.
Of the 42 potential fallen angels, 20 are members of major Standard & Poor's equity-based indices, including 13 from the S&P500.
Based on rated debt volume, TXU Corp., a U.S.-based utility company and an S&P500 index constituent, is the largest potential fallen angel with more than $15 billion in rated debt.
The report is available to subscribers of RatingsDirect, the real-time Web-based source for Standard & Poor's credit ratings, research, and risk analysis, 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
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