Bangkok--17 Sep--Standard & Poor's
Standard & Poor's investment-grade composite spread tightened one basis point yesterday to 237 basis points (bps), while its speculative-grade counterpart tightened 18 bps to 777 bps. By rating, the 'AA' and 'A' spreads tightened one basis point each to 159 bps and 198 bps, respectively; 'BBB' tightened 2 bps to 304 bps; 'BB' tightened 10 bps to 536 bps; 'B' tightened 16 bps to 751 bps; and 'CCC' tightened 30 bps to 1,209 bps.
By industry, financial institutions tightened by the largest margin of 7 bps to 421 bps, followed by industrials, which tightened 6 bps to 401 bps. Banks and telecommunications tightened 4 bps each to 336 bps and 327 bps, respectively, while utilities tightened one basis point to 227 bps.
Despite material tightening since their all-time highs reached in December 2008, the speculative-grade spread remains range-bound within 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