Bangkok--21 Dec--Standard & Poor's The credit crunch has not yet had a material impact on the key attributes of the European corporate ratings distribution, according to an article published today by Standard & Poor's. The report, titled "European Ratings Distribution: Pegging The Private Market (Premium)," says that new ratings on first-time rated issuers are still more or less keeping pace with 2006, though they are not as high as in the two prior years. "Among existing issuers, the risk of defaults and downgrades has increased due to the higher cost of capital and a changing risk appetite—although not many defaults or downgrades have been realized," said Diane Vazza, head of Standard & Poor's Global Fixed Income Research Group. "Ratings transitions remained largely stable through the third quarter of 2007, with nearly 77% of ratings unchanged, and the downgrade/upgrade ratio at an all-time low of 35%." European corporate ratings are still largely investment grade, though the percentage of speculative-grade ratings is rising among European financial and nonfinancial entities. As of Sept. 30, 2007, the investment-grade share of financial and nonfinancial entities rated by Standard & Poor's Ratings Services stood at 81.5%. The share of speculative-grade ratings increased to 18.5% at the end of the third quarter of 2007 from 8% in 1997 and just below 2% in 1990. Ms. Vazza added, "The advent of private-equity sponsors in recent years introduced new complexities to the European credit mix, particularly for the European nonfinancial segment. From 2003 through the second quarter of 2007, private credit estimate activity in Europe almost doubled, compared with a much weaker 12% growth in the rated cohort. Among them, the fastest growing segment has been in the 'b' category." 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]