Bangkok--31 Oct--Standard & Poor's
The number of potential downgrades reached 786 this month, the highest since September 2005, said an article published today by Standard & Poor's. This is an increase of 28 issuers over last month's count.
Potential downgrades are defined as entities that have either a negative outlook or ratings on CreditWatch with negative implications across rating categories 'AAA' to 'B-'.
By comparison, the number of potential downgrades in October is 136 more than what was reported in the same period a year ago and 118 more than the average of the past 38 months, according to the article, titled "Downgrade Potential Across Credit Grades And Sectors (Premium)." Further, the number of potential downgrades is more than triple the number of those poised for potential upgrades, a trend that has progressed for roughly 15 months.
"Despite materialized downgrades, the housing and financial sectors continue to show the highest downgrade risk, indicative of further rating actions if credit conditions continue to deteriorate," said Diane Vazza, head of Standard & Poor's Global Fixed Income Research Group.
Geographically, the U.S. continues to top the list of potential bond downgrades, with roughly one-quarter of current ratings showing downside risk.
By rating designation, 'B' rated companies have the greatest potential for downgrades, with 148 companies (19% of the total). Globally, of the 786 issuers at risk for downgrades, 81% are rated speculative grade ('BB+' or below).
RatingsDirect is the real-time Web-based source for Standard & Poor's credit ratings, research, and risk analysis, at www.ratingsdirect.com. The standard version of this article is part of our standard Global Fixed Income Research content. The premium version contains expanded analysis of the article's most significant points, typically broken out by sector and region. Also in the premium version are in-depth charts and tables, the underlying data of which are available for download. 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 Contacts:
Diane Vazza, New York (1) 212-438-2760