Bangkok--14 Nov--Standard & Poor's After a period of strong growth, the U.S. economy has slowed, according to an article published by Standard & Poor's on Oct. 30, 2007. The report, titled "U.S. Credit Comment: Trouble Brewing In Credit Cauldron (Premium)," said that the housing market should continue to be a drag on economic growth. "The U.S. ratings mix has become riskier," said Diane Vazza, head of Standard & Poor's Global Fixed Income Research Group. "Over the past 20 years, there has been a monumental shift in aggregate credit quality as financial policies have become more aggressive and increasingly focused on shareholder value. Moreover, the pace of new entrants has accelerated this shift during the past five years." The high volume of low-rated issuance since 2003 has transformed the dollar amount at risk. Given that the one-year average default transition rate for 'B-' rated entities is 11.38% and for 'CCC' and below rated firms 26.96%, heightened issuance in the 'B-' and below rating category should increase default pressure ahead. After four years of strong growth in the 'B-' or lower rating categories, seasoning phenomenon (that companies seldom default during the first few years after accessing the public debt markets, but with time, default rates increase) may be coming into play in the not so distant future. Ms. Vazza added, "Risk aversion has risen during the past few months, which raised the cost of capital, making it more difficult for firms in the most need of capital to find it. Given that risk aversion tends to rise during periods of stress, the increased number of firms at the lower rungs of the rating scale may amplify the default risk during a prolonged economic or financial market shock." 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. Media Contact: Mimi Barker, New York (1) 212-438-5054, [email protected] Analyst Contact: Diane Vazza, New York (1) 212-438-2760 Standard & Poor's, a division of The McGraw-Hill Companies (NYSE:MHP), is the world's foremost provider of financial market intelligence, including independent credit ratings, indices, risk evaluation, investment research and data. With approximately 8,500 employees, including wholly owned affiliates, located in 21 countries, Standard & Poor's is an essential part of the world's financial infrastructure and has played a leading role for more than 140 years in providing investors with the independent benchmarks they need to feel more confident about their investment and financial decisions. For more information, visit http://www.standardandpoors.com. Key Contacts: Americas Media Relations: (1) 212-438-6667 media_ [email protected] Americas Customer Service: (1) 212-438-7280 [email protected]