Bangkok--16 Sep--Standard & Poor's
Standard & Poor's investment-grade composite spread tightened marginally by one basis point yesterday to 238 basis points (bps), while its speculative-grade counterpart tightened 17 bps to 795 bps. By rating, the 'AA' spread remained unchanged at 160 bps; 'A' and 'BBB' tightened marginally by one basis point each to 199 bps and 306 bps, respectively; 'BB' tightened 10 bps to 546 bps; 'B' tightened 13 bps to 767 bps; and 'CCC' tightened 28 bps to 1,239 bps.
By industry, banks tightened by the largest margin of 9 bps to 340 bps, followed by telecommunications, which tightened 5 bps to 331 bps. Industrials followed, tightening 4 bps to 407 bps. Financial institutions and utilities tightened one basis point each to 428 bps and 229 bps, respectively.
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