Bangkok--26 Jan--Standard & Poor's
After hitting the astronomical record high of 85% this past month, the Standard & Poor's distress ratio fell to 70% as of Jan. 15, said an article published today by Standard & Poor's.
Despite receding, the distress ratio is at its second-highest level since the series began in October 2002, and it's considerably higher than the 11.1% in January 2008. This runs alongside the recent decline in the speculative-grade spread, which finished at 1,514 basis points (bps) on Jan. 15, down from 1,715 bps a month earlier. (Distressed credits are speculative-grade-rated issues that have option-adjusted spreads of more than 1,000 bps relative to Treasuries.)
Among distressed bonds, the total number of rated companies with issues trading with spreads of 1,000 bps and higher is currently 482, down from 540 this past month, according to the article, titled "U.S. Distressed Debt Monitor: Distress Ratio Inches Back From Its Record High (Premium)."
"Alongside a decrease in the distress ratio, the amount of affected debt fell from this past month's all-time high of $398 billion, to $299 billion in January," said Diane Vazza, head of Standard & Poor's Global Fixed Income Research Group. "Based on debt volume, the media and entertainment, oil and gas exploration and production, and high technology sectors together accounted for 40% of the total debt."
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 Ratings in the left navigation bar, select Find a Rating. Members of the media may request a copy of this report by contacting the media representative provided.
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