Bangkok--13 Mar--Standard & Poor's
Standard & Poor's investment-grade and speculative-grade composite spreads widened yesterday, to 488 basis points (bps) and 1,475 bps, respectively. Spreads widened an average of 18 bps for the investment-grade rating categories, the widest margin since Feb. 20, 2009, expanding the 'AA' spread to 336 bps, 'A' to 422 bps, and 'BBB' to 609 bps. The speculative-grade spreads widened in the 'BB' category as well, by 17 bps to 1,031 bps, but 'B' and 'CCC' tightened marginally to 1,644 bps and 3,379 bps, respectively.
Industry spreads widened across the board, with financial institutions and banks moving the most to 779 bps and 747 bps, respectively. Industrials and utilities widened 15 bps each to 880 bps and 450 bps, respectively, and telecommunications widened 17 bps to 664 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.
Media Contact:
Mimi Barker, New York (1) 212-438-5054, [email protected]
Analyst Contact:
Diane Vazza, New York (1) 212-438-2760