Bangkok--8 Feb--Standard & Poor's The number of entities poised to benefit from upgrades stood at 350 in January, 12 fewer than the number reported in December and 48 fewer than that reported 12 months ago, according to an article published yesterday by Standard & Poor's. The report, titled "Upgrade Potential Across Credit Grades And Sectors (Premium)," says that the number of potential upgrades is 34 less than the 12-month average of 2007. "The number of potential bond upgrades has dropped to its lowest level in 21 months," said Diane Vazza, head of Standard & Poor's Global Fixed Income Research Group. "The deceleration in potential bond upgrades this month fits with expectations that the roster of issuers expected to benefit from potential upgrades will likely diminish further as factors that support potential upgrade momentum weaken from peak levels in response to the credit environment's decisive turn for the worse." Within nonfinancials, telecommunications and metals, mining, and steel sectors appear especially well placed for potential upgrades. In these sectors, the proportion of issuers with a positive bias is higher than it has been historically, highlighting the likelihood that companies within these sectors will be upgraded in the relatively near future. By count, financial companies still lead other sectors most likely to benefit from upgrades, of which almost 66% are domiciled outside the U.S. However, banks' performance in the near term will be exposed to exceptional volatility in capital markets and a gradual deterioration in the credit environment. Ms. Vazza added, "Over the past few months, banks have seen significant widening of spreads and more difficult liquidity conditions, particularly in North America and Europe as the dislocation in the housing sector has affected other asset classes. While financial companies in the emerging markets will likely continue to show strength, the more mature markets are more likely to stabilize than improve in the near term." 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.