Bangkok--4 Sep--Standard & Poor's
Standard & Poor's investment-grade composite spread tightened marginally yesterday, by one basis point to 245 basis points (bps), while its speculative-grade counterpart expanded slightly by 4 bps to 842 bps. By rating, the 'AA' and 'BBB' spreads tightened one basis point each to 162 bps and 314 bps, respectively. The 'A' spread tightened 2 bps to 205 bps, 'BB' expanded 3 bps to 572 bps, 'B' expanded 5 bps to 803 bps, and 'CCC' expanded 4 bps to 1,324 bps.
By industry, financial institutions and banks tightened 2 bps each to 440 bps and 362 bps, respectively, while industrials and utilities tightened one basis point each to 423 bps and 231 bps, respectively. Telecommunications widened by one basis point to 349 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
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