Bangkok--7 Aug--Standard & Poor's There was little reaction from the bond market to the Fed's decision to hold the federal funds rate at 2% on Tuesday. Standard & Poor's U.S. investment-grade composite credit spread widened slightly to 265 basis points (bps) yesterday, an increase of 1 bp from Monday's figure and 30% wider than the beginning of the year. Standard & Poor's U.S. speculative-grade composite credit spread tightened 2 bps to 760 bps. Speculative-grade spreads are 33% wider than the start of the year and 79% wider than the five-year moving average. With continued pressure on financial institutions and banks, we expect the investment-grade credit spread to remain range-bound at present high levels. The speculative-grade credit spread is poised for continued volatility, commensurate with an escalation in speculative-grade defaults over the course of this year. Media Contact: Mimi Barker, New York (1) 212-438-5054, [email protected] Analyst Contacts: Diane Vazza, New York (1) 212-438-2760