Bangkok--22 Sep--Standard & Poor's
Both Standard & Poor's investment-grade and speculative-grade composite spreads tightened on Friday, to 231 basis points (bps) and 741 bps, respectively. By rating, spreads tightened across the board, with the 'AA' spread compressing one basis point to 155 bps, 'A' compressing 2 bps to 193 bps, 'BBB' tightening 3 bps to 296 bps, 'BB' tightening 10 bps to 516 bps, 'B' compressing 13 bps to 714 bps, and 'CCC' tightening 28 bps to 1,137 bps.
By industry, industrials tightened by the largest margin of 6 bps to 385 bps, followed by financial institutions and banks, which tightened 5 bps each to 405 bps and 324 bps, respectively. Utilities followed, tightening 2 bps to 222 bps, and telecommunications remained unchanged at 324 bps.
Despite material tightening since their record highs 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
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