Bangkok--31 Aug--Standard & Poor's
Standard & Poor's investment-grade composite spread remained unchanged yesterday at 244 basis points (bps), while its speculative-grade counterpart tightened 4 bps to 826 bps. By rating, the 'AA' spread tightened 3 bps to 160 bps; 'A' and 'BBB' compressed one basis point each to 205 bps and 315 bps, respectively; 'BB' and 'B' tightened 2 bps each to 559 bps and 787 bps, respectively; and 'CCC' expanded one basis point to 1,313 bps.
All industries other than telecommunications tightened one basis point yesterday, with financial institutions compressing to 446 bps, banks to 365 bps, industrials to 422 bps, and utilities to 232 bps. Telecommunications remained unchanged at 343 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]
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Diane Vazza, New York (1) 212-438-2760
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