Bangkok--28 Jun--Standard & Poor's Issuance in 2007 continues at a record pace, recording $446 billion in combined supply from high-yield and leveraged loans by the first week of June, according to an article published by Standard & Poor's. The report titled, "U.S. High-Yield Prospects: Keeping The Powder Dry," states that issuance by 'B-' and below rated issuers is accelerating and now comprises 46% of the aggregate high-yield bond issuance in 2007, compared with 32% in the same period a year ago. "As the case has been all year, the majority of new issuance in the high-yield and leveraged-loan markets has been marked for M&A or equity-related transactions," said Diane Vazza, head of Standard & Poor's Global Fixed Income Research Group. "If financial conditions deteriorate further, the issuance calendar could accelerate in the near term as issuers rush through deals to take advantage of a closing window of opportunity." Notwithstanding increased volatility, spread movements among corporate bonds have been relatively restrained. Speculative-grade spreads averaged 291 bps in May and 277 bps for June through June 20, versus 307 in April. Credit metrics for speculative-grade credits moderated in May. There were 21 downgrades and 21 upgrades during the month, while forward-looking credit metrics based on outlooks and CreditWatch status slipped. Net negative bias rose to 15.34% from 14.7% in April. However, this is still below average over the past three years (17%). Ms. Vazza added, "While LBOs continue to pile on debt, with transactions at eye-popping leverage multiples, the average U. S. corporate firm has been in fairly good shape. However, slower-than-expected earnings growth and accelerating debt growth should begin to raise aggregate leverage. Leverage is already on an upward trend among speculative-grade loan issuers." 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] . Ratings information can also be found on Standard & Poor's public Web site at www.standardandpoors.com ; under Credit Ratings in the left navigation bar, select Find a Rating, then Credit Ratings Search. Members of the media may request a copy of this report by contacting the media representative provided. Media contact: Mimi Barker (1) 212 438 5054 [email protected]