Bangkok--2 Sep--Standard & Poor's
Standard & Poor's investment-grade and speculative-grade composite spreads widened yesterday to 245 basis points (bps) and 832 bps, respectively. By investment-grade rating, the 'AA' spread remained unchanged at 161 bps, while 'A' and 'BBB' widened one basis point each to 205 bps and 315 bps, respectively. On the speculative-grade side, the 'BB' spread widened 4 bps to 565 bps, 'B' widened 5 bps to 793 bps, and 'CCC' widened 3 bps to 1,314 bps.
Industrials widened the most yesterday, expanding 6 bps to 422 bps, followed by telecommunications, which widened 3 bps to 346 bps. Utilities widened 2 bps to 232 bps and financial institutions tightened by the same increment to 441 bps. Banks tightened one basis point to 363 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:
Mimi Barker, New York (1) 212-438-5054, [email protected]
Analyst Contact:
Diane Vazza, New York (1) 212-438-2760