Bangkok--29 Sep--Standard & Poor's
Standard & Poor's investment-grade composite spread tightened one basis point on Friday to 230 basis points (bps), while its speculative-grade counterpart remained unchanged at 735 bps. By rating, the 'AA' and 'A' spreads tightened one basis point each to 155 bps and 192 bps, respectively; 'BBB' tightened 2 bps to 292 bps; 'BB' tightened one basis point to 513 bps; 'B' remained unchanged at 706 bps; and 'CCC' tightened one basis point to 1,121 bps.
Spreads tightened marginally by industry, with financial institutions and telecommunications tightening by the largest margin of 2 bps each to 395 bps and 326 bps, respectively. Industrials and utilities tightened one basis point each to 379 bps and 219 bps, respectively, and banks widened one basis point to 321 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.
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Ana Sandoval, New York (1) 212-438-5095, [email protected]
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