Bangkok--21 Apr--Standard & Poor's The market continued to reprice risk in the first quarter of 2008, according to an article published yesterday by Standard & Poor's. The report, titled "U.S. Investment-Grade Spreads Sector Index Review: A Challenging Start To 2008," says that risk premiums for U.S. investment-grade bonds widened 65 basis points (bps) in the first quarter, continuing their upward movement that started at the end of June 2007. "Global write-downs for banks, brokerages, insurers, and mortgage companies are already in excess of $250 billion, and more are expected," said Diane Vazza, head of Standard & Poor's Global Fixed Income Research Group. "Fears over banks' capital positions have pushed spreads wider over the past two quarters." However, while negative pressures on financials continue, the decline in short-term funding costs and the steepening of the yield curve are positives for banks' and brokerage firms' profits. The three-month LIBOR has fallen 200 bps, and three-month financial commercial paper have declined 135 bps between the end of 2007 and April 14, while the slope of the yield curve, measured by the difference between the 10-year Treasury yield and the three-month Treasury yield, has increased 173 bps. We expect that the Treasury yield curve will continue to steepen throughout 2008 and early 2009, reaching 238 bps by the end of the first quarter of 2009. Ms. Vazza added, "Nonfinancial spreads have widened substantially in 2008, with housing-sensitive industries, such as homebuilders and building materials, having the largest percentage increases. Industries that benefit from exports have faired relatively better than those that do not. And, sectors sensitive to consumer spending have been hit hard." 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