Bangkok--14 Aug--Standard & Poor's Globally, fallen angels still exceed rising stars in the year to date, but this masks a divergence of trend in crossover activity in the U.S. compared with worldwide, according to an article published yesterday by Standard & Poor's. The report, titled "Global Potential Fallen Angels," said that in the U.S., fallen angels have exceeded rising stars each year since 2005, in sharp contrast with the trend observed in other markets. "M&A continues to be a key force behind fallen angel activity, accounting for three out of the four additions this month," said Diane Vazza, head of Standard & Poor's Global Fixed Income Research Group. "In the year to date, 71.4% of fallen angels were associated with acquisition-related activity, indicating that M&A has played a major role in the crossover of companies to speculative grade from investment grade. Also, as of Aug. 1, 53% of companies identified as most likely to lose their investment-grade status were affected by risks from acquisition-related, including LBO activity." Globally, 33 entities are at risk of becoming fallen angels, with rated debt totaling US$50.2 (?36.4) billion. Potential fallen angels are defined as entities rated 'BBB-' with either a negative outlook or on CreditWatch with negative implications. This month's tally is four fewer than the number recorded last month and nine less than 12 months ago. Year to date, 22 fallen angels were recorded, affecting rated debt worth US$63.9 (?46.3) billion. This is an increase of four issuers since last month. In the same period a year ago, 30 issuers were downgraded to speculative grade, with US$36.9 (?27) billion in rated debt. The volume of debt affected by fallen angels has increased substantially in 2007. Three issuers accounted for over 40% of the US$63.9 billion affected year to date, which is already a sizeable 91% of the total US$70.2 (?51.4) billion attributed to fallen angel downgrades in 2006. Based on rated-debt volume, Embarq Corp., a U.S.-based telecommunications company and listed on the S&P 500 index, is the largest potential fallen angel, with more than US$6.6 billion in rated debt. Ms. Vazza added, "The sectors most vulnerable to generating fallen angels by number of issuers are utilities, consumer products, health care, and high technology. By debt volume, the lineup is utilities, telecommunications, and media and entertainment." 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, New York (1) 212-438-5054, [email protected] Analyst Contact: Diane Vazza, New York (1) 212-438-2760