Bangkok--12 Apr--Standard & Poor's
In 2007 year to date, eight fallen angels were recorded, affecting rated debt worth US$29.5 (?22.1) billion, according to an article published today by Standard & Poor's. The report, titled "Global Potential Fallen Angels," said that this is an increase of three issuers from last month's report, all of these were U.S.-based companies. Also, in the same period last year, 10 issuers were downgraded to speculative grade with US$12.6 (?9.4) billion in rated debt.
"The volume of debt affected by fallen angel activity has increased substantially in 2007 as a result of the TXU Corp. downgrade last month," said Diane Vazza, head of Standard & Poor's Global Fixed Income Research Group. "The US$29.5 billion affected year-to-date debt is already 36.4% of the total US$70.1 (?53.9) billion volume attributed to fallen angel downgrades in 2006."
All three reported fallen angels since our last monthly report, Dollar General Corp., ServiceMaster Co. (The), and First Data Corp., were downgraded as a result of proposed acquisition activities. In the full-year 2006, acquisition-related activity accounted for 30% of fallen angels by number of issuers and 60% by debt volume.
Ms. Vazza added, "rising stars in year-to-date 2007 exceed fallen angels by a margin of five entities, though the debt affected by fallen angel activity is much larger. Also, globally, 37 entities are at risk of becoming fallen angels, with rated debt totaling US$59.8 (?44.8) billion. This is two less than last month and 10 fewer than in April 2006."
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