Bangkok--7 Dec--Standard & Poor's The consumer products, media and entertainment, and retail/restaurants sectors remain most susceptible to economic and credit market turbulence, according to an article published today by Standard & Poor's. The report, titled "Stress In Corporate America: Consumer-Reliant Sectors Still Vulnerable (Premium)," says that judging by the current distributions of outlooks and CreditWatch listings, these three sectors—generally classified as consumer discretionary—have the greatest potential vulnerability to downgrades. "Weakness in these sectors is a result of the tenuous outlook associated with the U.S. consumer, which is critical to continued economic expansion as it accounts for 70% of U.S. GDP," said Diane Vazza, head of Standard & Poor's Global Fixed Income Research Group. "These cyclical sectors rely heavily on the pace of consumer spending, which is expected to decline in the remainder of 2007 and into 2008, despite its steady pace under increasing strain through the first half of this year. We expect consumer spending to advance only 1.8% in 2008, a deceleration compared with early 2007 and full-year 2006." Market movements among these three sectors continue to be significant, with bond spreads and distress ratios at elevated levels compared with the overall nonfinancial rated universe. Note that bond spreads are highest for the retail/restaurant sector, followed by consumer products. Meanwhile, at 10%, the distressed ratio is highest in the retail/restaurants category, followed by consumer products at 9.5% and media/entertainment at 6.4%. Ms. Vazza added, "At $6.8 billion, speculative-grade issuance activity has been torrid within retail/restaurants in the year to date, but less active for the other two sectors. High-yield issuance within these three sectors has hit a standstill in the last month after a healthier October, signaling a return to the dearth of speculative-grade issuance seen over the summer. Nevertheless, the trailing three-year cumulative issuance figures are impressively high for all three sectors, suggesting that a raft of low-grade new issuance materialized in recent years." 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]