Bangkok--13 Nov--Standard & Poor's Two U.S. 'AAA' nonfinancial firms are currently either on CreditWatch with negative implications or have a negative outlook, according to an article published by Standard & Poor's on Nov. 5, 2007. The report, titled "U.S. Credit Comment: 'AAA' Corporates On CreditWatch Negative Or Negative Outlook (Premium)," said that only six entities in the U.S. (including tax havens) are rated 'AAA', five of which have debt. "There has been a decline in 'AAA' firms over the years, with the current trend beginning in 1998," said Diane Vazza, head of Standard & Poor's Global Fixed Income Research Group. "The number of 'AAA' firms declined to 12 by 2002 from 25 in 1992 and slipped to seven in 2006." Forgoing the benefit of a 'AAA' rating has not come at an extremely high cost. The average difference in yield on 10-year corporate bonds for an industrial firm rated 'AA' versus 'AAA' has been 13 basis points (bps) since 1996, while 'A' rated 10-year issues have demanded a 24 bps premium versus 'AAA' 10-year bonds (based on the difference in average monthly yields since February 1996). Ms. Vazza added, "Part of the change is due to the shift in corporate financial strategy. Firms have become more focused on shareholder return and have begun to manage their balance sheets accordingly. Firms that were rated 'AAA' previously have applied more leverage and increased their risk profile in light of increasing foreign competition." The report is available to RatingsDirect subscribers who have upgraded their package to include the Global Fixed Income Research add-on. RatingsDirect is 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 with the Global Fixed Income Research add-on, please contact your local Standard & Poor's representative or [email protected] for further information. 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.