Bangkok--10 Sep--Standard & Poor's
Standard & Poor's investment-grade and speculative-grade composite spreads tightened marginally yesterday to 242 basis points (bps) and 826 bps, respectively. By rating, the 'AA' spread remained unchanged at 162 bps; 'A' and 'BBB' tightened one basis point each to 203 bps and 311 bps, respectively; 'BB' tightened 3 bps to 559 bps; 'B' tightened one basis point to 791 bps; and 'CCC' tightened 8 bps to 1,308 bps.
Most of the industry spreads tightened as well, with financial institutions tightening by the largest increment of 4 bps to 435 bps, followed by banks and telecommunications, which tightened 2 bps each to 357 bps and 344 bps, respectively. Industrials tightened one basis point to 419 bps and utilities remained unchanged at 231 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:
Ana Sandoval, New York (1) 212-438-5095, [email protected]
Analyst Contact:
Diane Vazza, New York (1) 212-438-2760