Bangkok--18 May--Standard & Poor's
An analysis of the U.S. ratings distribution reveals that 49.83% of the 2,954 rated issuers have speculative-grade ratings, slightly higher than the level at the end of 2008 but less than the 51.27% seen at the end of 2007, said an article published today by Standard & Poor's.
"The number of issuers rated 'B-' and lower is at its highest level ever, at 355 issuers, or 26.8% of the speculative-grade population," said Diane Vazza, head of Standard & Poor's Global Fixed Income Research Group. "The number of issuers with weak credit profiles, combined with weak economic fundamentals, should continue to lift the default rate into early 2010."
The current ratings universe of parents and major subsidiaries in U.S. corporates, excluding issuers currently rated 'D' or 'SD', decreased to 2,954 at the end of the first quarter of 2009 from 3,018 at the end of 2008 and 3,194 at year-end 2007, according to the article, titled "U.S. Ratings Distribution: A Rising Share Of Issuers Rated 'B-' And Lower Foretells More Defaults (Premium)."
Nonfinancial entities totaled 2,174, of which 1,356 (62.37%) were rated speculative grade. Financials totaled 801, of which 116, or 14.8%, had speculative-grade ratings.
Standard & Poor's had only 23 newly rated entities in the first quarter, nine of which were re-rated after they were downgraded to 'SD' because of a distressed exchange. We expect that new issuer growth will be minimal throughout the rest of 2009. This is in stark contrast to 2004-2007, when new issuers rated for the first time averaged 337 each year. Speculative-grade ratings were prevalent during this time, accounting for 83% of the new ratings.
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.
Media Contact:
Mimi Barker, New York (1) 212-438-5054, [email protected]
Analyst Contacts:
Diane Vazza, New York (1) 212-438-2760
Key Contacts:
Americas Media Relations: (1) 212-438-6667
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Americas Customer Service: (1) 212-438-7280
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