Bangkok--19 Oct--Standard & Poor's
Three new issuers have crossed over to investment grade from speculative grade in the last month, according to a report published today by Standard & Poor's Ratings Services. According to the report, titled "Global Potential Rising Stars," 24 issuers have crossed over to investment grade in the year to date, the lowest since 2003 and well below the 40 issuers that crossed over in the same period last year.
As of Oct. 12, 2006, 32 rated entities globally were best placed to acquire rising-star status, one less than the number reported in September but two more than the count one year ago. Together, these 32 entities constitute US$54.7(?43.6) billion in rated debt.
"Globally, the cumulative count of fallen angels continues to outpace rising stars by a margin of 14 entities (as of Oct. 12), which is a reversal of the pattern seen in 2004 and 2005," explained Diane Vazza, head of Standard & Poor's Global Fixed Income Research Group. "The U.S. was a precursor to the global trend, with fallen angels first exceeding rising stars in 2005."
The 24 entities that crossed over to investment grade from speculative grade in the year to date have a total rated debt worth of US$31.7 (?25.2) billion.
Though there are no serious signs of weakness, the proportion of entities listed with a positive bias across the entire ratings spectrum has stabilized at 15%. In the U.S., the positive bias — at 12% - is lower than the global share, having crested slightly earlier in the fourth quarter of 2005. Looking ahead, rising star activity should continue to decelerate with the anticipated turn in the credit cycle. Indeed, the current number of rising stars in the year to date already lags the level recorded in the past two years.
Globally, sectors displaying the highest count of potential rising stars included utilities and banks with five entities each, insurance with four entities, and capital goods with three entities.
In terms of rated debt outstanding, the utility sector was the most prominently placed for the highest amount of debt affected by potential upgrades, followed by integrated oil and gas, banks, and high technology.
Based on rated debt volume, OAO Gazprom, a Russia-based gas company, was the largest issuer poised to potentially ascend to investment grade.
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:
Marc Eiger, New York (1) 212-438-1280, [email protected]
Analyst Contacts:
Diane Vazza, New York (1) 212-438-2760