Bangkok--1 Oct--Standard & Poor's
Standard & Poor's investment-grade composite spread expanded marginally by one basis point yesterday to 231 basis points (bps), while its speculative-grade counterpart remained unchanged at 735 bps. By rating, the 'AA' spread tightened one basis point to 155 bps; 'A' and 'BBB' expanded one basis point each to 193 bps and 292 bps, respectively; 'BB' remained unchanged at 513 bps; 'B' tightened one basis point to 706 bps; and 'CCC' remained unchanged at 1,124 bps.
By industry, financial institutions tightened 2 bps to 392 bps, while banks, utilities, and telecommunications expanded one basis point each to 322 bps, 220 bps, and 330 bps, respectively. Industrials remained unchanged at 378 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