Bangkok--31 Jul--Standard & Poor's
Standard & Poor's investment-grade and speculative-grade composite spreads tightened yesterday, to 266 basis points (bps) and 885 bps, respectively. Spreads compressed across the board by rating as well, with the 'AA' spread compressing by 3 bps to 173 bps, 'A' by 5 bps to 228 bps, 'BBB' by 6 bps to 355 bps, 'BB' and 'B' by 12 bps each to 593 bps and 819 bps, respectively, and 'CCC' by 17 bps to 1,428 bps.
Industrials led spread compression by industry, tightening 8 bps to 466 bps, followed by financial institutions, which tightened 6 bps to 504 bps. Utilities and telecommunications followed, tightening 5 bps each to 265 bps and 357 bps, respectively, and bank spreads tightened by the smallest increment of 4 bps to 396 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 Contacts:
Diane Vazza, New York (1) 212-438-2760
Key Contacts:
Americas Media Relations: (1) 212-438-6667
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Americas Customer Service: (1) 212-438-7280
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