Bangkok--29 Jul--Standard & Poor's
Standard & Poor's investment-grade and speculative-grade composite spreads tightened yesterday, to 276 basis points (bps) and 901 bps, respectively. By rating, the 'AA' and 'BBB' spreads tightened 3 bps each to 180 bps and 368 bps, respectively, 'A' tightened 2 bps to 237 bps, 'BB' tightened 8 bps to 614 bps, 'B' tightened 10 bps to 838 bps, and 'CCC' tightened 17 bps to 1,462 bps.
Spreads tightened across the board by industry as well, with industrials tightening by the largest margin of 5 bps to 483 bps, followed by telecommunications, which tightened 3 bps to 365 bps. Utilities tightened 2 bps to 278 bps, and financial institutions and banks tightened one basis point each to 513 bps and 403 bps, respectively.
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 Contacts:
Diane Vazza, New York (1) 212-438-2760
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Americas Media Relations: (1) 212-438-6667
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