Bangkok--22 Jul--Standard & Poor's
Standard & Poor's investment-grade and speculative-grade composite spreads tightened yesterday, to 290 basis points (bps) and 957 bps, respectively. By rating, the 'AA' and 'BBB' spreads tightened one basis point each to 188 bps and 383 bps, respectively. The 'A' spread tightened 3 bps to 248 bps, 'BB' expanded 2 bps to 657 bps, 'B' tightened 3 bps to 893 bps, and 'CCC' compressed 20 bps to 1,577 bps.
By industry, financial institutions expanded one basis point to 525 bps while all other industries tightened--banks by 6 bps to 409 bps, industrials by 3 bps to 513 bps, utilities by one basis point to 289 bps, and telecommunications by 2 bps to 393 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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