Bangkok--24 Sep--Standard & Poor's
Continuing its descent in 2009, Standard & Poor's distress ratio has hit another low this year, reaching 23.5% as of Sept. 15. This is down from 25.3% in August, said an article published Tuesday, September 22 by Standard & Poor's.
The decrease in distress is coincident with movement in corporate bond spreads. The speculative-grade corporate bond spread was at 777 basis points (bps) on Sept. 15, down from 816 bps a month earlier, according to the article, titled "U.S. Distressed Debt Monitor: Distress Ratio Declines Slightly In September (Premium)."
Standard & Poor's distress ratio is defined as the number of high-yield securities trading at spreads greater than 1,000 bps relative to Treasuries divided by the total number of speculative-grade-rated issues.
Among distressed bonds, the total number of companies with issues trading with spreads of 1,000 bps and higher is currently 193, down from 208 in August.
"With a decrease in the distress ratio, the amount of affected debt also fell, to $101.9 billion from $116.4 billion in August," said Diane Vazza, head of Standard & Poor's Global Fixed Income Research Group. "Based on debt volume, the finance companies, media and entertainment, and high technology sectors together accounted for 52.2% of the total debt outstanding."
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