Bangkok--28 Jul--Standard & Poor's
Standard & Poor's investment-grade and speculative-grade composite spreads tightened on Friday, to 279 basis points (bps) and 909 bps, respectively. By rating, the investment-grade spreads compressed 2 bps across the board, with 'AA', 'A', and 'BBB' tightening to 183 bps, 239 bps, and 371 bps, respectively. The speculative-grade spreads by rating were tighter across the board as well, with 'BB' tightening one basis point to 622 bps, 'B' tightening 5 bps to 848 bps, and 'CCC' tightening by the largest increment of 18 bps to 1,479 bps.
By industry, industrials tightened by the largest margin of 5 bps to 489 bps, while all other industries tightened 2 bps each, to 514 bps for financial institutions, 404 bps for banks, 280 bps for utilities, and 368 bps for telecommunications.
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:
David Wargin, New York (1) 212-438-1579, [email protected]
Analyst Contact:
Diane Vazza, New York (1) 212-438-2760