Bangkok--30 Sep--Standard & Poor's
Standard & Poor's investment-grade and speculative-grade composite spreads remained unchanged yesterday at 230 basis points (bps) and 735 bps, respectively. By rating, the 'AA' spread expanded one basis point to 156 bps, 'A' remained unchanged at 192 bps, and 'BBB' tightened one basis point to 291 bps. The 'BB' spread remained unchanged at 513 bps, 'B' expanded one basis point to 707 bps, and 'CCC' expanded 3 bps to 1,124 bps.
Spreads were mixed by industry, with financial institutions and industrials tightening one basis point each to 394 bps and 378 bps, respectively. Banks and utilities remained unchanged at 321 bps and 219 bps, respectively, and telecommunications expanded 3 bps to 329 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