Bangkok--15 Jan--Standard & Poor's Globally, 42 fallen angels were recorded affecting rated debt worth US$131.3 (?89.2) billion in 2007, according to an article published by Standard & Poor's on Friday, Jan. 11, 2008. The report, titled "Global Potential Fallen Angels (Premium)," says that six new fallen angels were added since last month's report, of which four are based in the U.S. "Globally, fallen angels outpaced rising stars in 2007, as in 2006, but in contrast with 2004 and 2005," said Diane Vazza, head of Standard & Poor's Global Fixed Income Research Group. "The volume of debt affected by fallen angels in 2007 nearly doubled in 2007, with 42 issuers affecting rated debt worth $131.3 billion compared with $70.2 billion in 2006." Financial market turbulence has put a lid on M&A activity, which played a dominant role in the crossover of companies to speculative grade from investment grade in 2007. This month, the share of fallen angels (by number of issuers) associated with acquisition-related activity inched down to 43% from 47% a month ago. As of Jan. 7, 2008, 27% of companies identified as most likely to lose their investment-grade status were affected by risks from acquisition-related activity compared with 53% in our midyear report. The pipeline for potential crossover activity is still considerable, with 40 entities accounting for rated debt of US$56.6 (?38.45) billion listed as potential fallen angels as of Jan. 7, defined as entities rated 'BBB-' with either a negative outlook or on CreditWatch with negative implications. Ms. Vazza added, "The sectors most vulnerable to generating fallen angels by number of issuers are forest products and building materials followed by homebuilders and real estate companies. By debt volume, the lineup among potential fallen angels are the homebuilders and real estate companies, forest products and building materials, media and entertainment, and utility sectors." 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.