Bangkok--22 Jan--Standard & Poor's
Standard & Poor's composite spreads widened across the board yesterday, leading the investment-grade composite to 497 basis points (bps) and the speculative-grade composite to 1,501 bps. By rating, the investment-grade spreads widened an average of 1%, leaving 'AA' at 337 bps, 'A' at 424 bps, and 'BBB' at 630 bps. The speculative-grade spreads widened an average of 2%, with 'BB' at 991 bps, 'B' at 1,598 bps, and 'CCC' at 3,088 bps.
Industry spreads also widened, by an average of 7 bps, or 1%, with financial institutions at 716 bps, banks at 557 bps, industrials at 847 bps, utilities at 501 bps, and telecommunications at 633 bps.
With speculative-grade defaults accelerating, a higher preponderance of credit downgrades, and a general malaise about the future of the economy, we expect spreads to remain at their elevated levels for some time as investors, the credit markets, and the economy cautiously tread through the current recession.
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