Bangkok--14 May--Standard & Poor's Our current ratings universe of U.S. corporates that are not in default decreased by 23 to 3,174 at the end of the first quarter of 2008 from 3,197 at the end of 2007, according to an article published yesterday by Standard & Poor's. The report, titled, "U.S. Ratings Distribution: Glut Of Low-Rated Issuers Could Mean Escalating Default Rates," says that 35 speculative-grade rated firms either defaulted or had their ratings withdrawn, and 12 firms were assigned first-time investment-grade ratings. "Though credit conditions remain challenging, there have been some initial signs of improvement for corporate bond prices; both the high-yield and investment-grade markets have rallied since mid-March," said Diane Vazza, head of Standard & Poor's Global Fixed Income Research Group. "Reported earnings for S&P 500 firms in the first quarter have also been relatively healthy for most corporate sectors, with financials the main exception." There has been a significant slowdown in the rate of new entrants, as the challenging credit environment has not been supportive of new issuers or new debt offerings. In the first quarter of 2008, there were only 29 new entrants to the rated population, down from 98 in the first quarter of 2007. This is the slowest first quarter by newly rated issuers since 1991. The tightening of lending standards in both the bond and bank lending markets may block smaller, speculative-grade firms from accessing capital. The number of high-yield firms decreased to 1,600 from 1,635, as firms defaulted or ratings were withdrawn, though the total share of high-yield issuance is still over 50%. Ms. Vazza added, "With profits still at risk within a weaker economic environment, we foresee a continued slide in credit quality, with downgrades outpacing upgrades in both investment grade and high yield, as well as an increase in the trailing-12 month speculative-grade default rate to 4.7% by the end of the first quarter of 2009." 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 and markets, 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]