Bangkok--30 Jul--Standard & Poor's
Standard & Poor's investment-grade and speculative-grade composite spreads tightened yesterday, to 271 basis points (bps) and 897 bps, respectively. By rating, the 'AA' and 'A' spreads tightened 4 bps each to 176 bps and 233 bps, respectively, 'BBB' tightened 7 bps to 361 bps, 'BB' tightened 9 bps to 605 bps, 'B' tightened 7 bps to 831 bps, and 'CCC' tightened 17 bps to 1,445 bps.
Spreads tightened across the board by industry as well, with industrials once again tightening by the largest increment of 9 bps to 475 bps, followed by utilities, which tightened 7 bps to 271 bps. Telecommunications and financials tightened by the smallest margins of 4 bps and 3 bps, respectively, leaving telecommunications at 361 bps, financial institutions at 510 bps, and banks at 401 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:
David Wargin, New York (1) 212-438-1579, [email protected]
Analyst Contact:
Diane Vazza, New York (1) 212-438-2760
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Americas Media Relations: (1) 212-438-6667
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