Bangkok--3 Mar--Standard & Poor's
Both Standard & Poor's investment-grade and speculative-grade composite spreads widened on Friday, to 465 basis points (bps) and 1,380 bps, respectively. Rating spreads were mixed on the investment-grade side, with the 'AA' and 'A' spreads tightening to 325 bps and 390 bps, respectively, while 'BBB' widened 8 bps to 589 bps. The 'BB', 'B', and 'CCC' spreads all widened, completing February at 902 bps, 1,527 bps, and 3,311 bps, respectively.
Industry spreads widened across the board, by 7 bps on average, expanding financial institutions to 719 bps, banks to 667 bps, industrials to 833 bps, utilities to 426 bps, and telecommunications to 618 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 recessionary period.
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