Bangkok--20 Jul--Standard & Poor's
Standard & Poor's investment-grade composite spread tightened marginally yesterday to 297 basis points (bps), while its speculative-grade counterpart expanded 4 bps to 973 bps. By rating, the 'AA' and 'A' spreads tightened 2 bps each to 193 bps and 255 bps, respectively. The 'BBB' spread tightened 3 bps to 388 bps, 'BB' expanded one basis point to 668 bps, 'B' remained flat at 909 bps, and 'CCC' tightened 5 bps to 1,616 bps.
By industry, the bank spread tightened 6 bps to 423 bps, utilities tightened 3 bps to 294 bps, industrials and telecommunications tightened one basis point each to 523 bps and 401 bps, respectively, and financial institutions remained flat at 527 bps.
Despite material tightening since their all-time highs reached in December 2008, the speculative-grade spread remains near some of the highest levels ever recorded in a default cycle, and the investment-grade spread continues to face pressure from financial institutions and banks. In addition, speculative-grade defaults continue to accelerate, as does the preponderance of credit downgrades. Because of these factors, 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
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