Bangkok--28 Jul--Standard & Poor's
Although it has been more than a year and a half since the official start of the current recession, global credit markets are still feeling the crunch, said an article published today by Standard & Poor's.
This past quarter saw a global downgrade ratio of 89.3% (defined as the total count of downgrades divided by the total count of upgrades and downgrades). This ties for the third most severe quarterly downgrade ratio in the 22-year history of our data series--only slightly better than the two quarters that preceded it, according to the article, titled "Global Corporate And Sovereign Rating Actions: Second-Quarter 2009 (Premium)."
"The slight decrease in this quarter's downgrade ratio does not by any means mark the end of the current recession," said Diane Vazza, head of Standard & Poor's Global Fixed Income Research Group. "However, this past quarter's downgrade ratio of 93.3% likely was the worst in this credit cycle, as many of the conditions that are causing downward ratings momentum, including low debt issuance and wide spreads, have eased off their extreme levels since the fall of 2008."
With a global negative bias of 36.6% (total number of issuers with a negative outlook or ratings on CreditWatch with negative implications divided by the total number of issuers), downgrades are expected to remain very high over the upcoming quarters, albeit at a slower place.
This article is part of our premium Global Fixed Income Research content, which is available to premium subscribers to RatingsDirect, at www.ratingsdirect.com. 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.
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