Bangkok--27 Feb--Standard & Poor's Before the recent shift, merger and acquisition (M&A) activity played a dominant role in the crossover of companies to speculative grade from investment grade in 2007, with 44% of movements to the speculative-grade domain citing M&A activity, according to an article published today by Standard & Poor's. The report, titled "Crossover Credits Wrap Up: 2007 (Premium)," says that in 2008, however, to expect a downturn in M&A activity across the credit spectrum because of higher volatility and a more expensive financing environment for all but the most creditworthy buyers. "Globally, fallen angels outpaced rising stars in 2007, with 42 fallen angels versus 36 rising stars," said Diane Vazza, head of Standard & Poor's Global Fixed Income Research Group. "Growing financial market disruptions in the latter half of the year favored downward movements in credit quality. This is in sharp contrast with the beginning of 2007, when rising stars surpassed fallen angels. The trend in crossovers mirrored that of the larger ratings universe, which also had stronger movements downward in the latter half of the year." The volume of debt affected by fallen angels in 2007 nearly doubled, to US$131.3 (89.19) billion from US$70.2 ( 47.69) billion in 2006, dwarfing that of rising stars, which accounted for US$71.8 ( 48.78) billion of rated debt in 2007, compared with US$44.9 ( 30.5) billion in 2006. Ms. Vazza added, "By sector, homebuilders/real estate and health care recorded the largest number of fallen angels, with six each in 2007. By debt volume, telecommunications led, with three fallen angels, accounting for $19.6 billion worth of rated debt. Among rising stars, however, banks in the emerging markets with eight issuers and oil and gas exploration and production with five, led the group. By debt volume, the oil and gas exploration and production sector led, with $24.2 billion worth of rated debt." 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 23 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]