Bangkok--21 Oct--Standard & Poor's
Continuing its decline since the beginning of 2009, Standard & Poor's distress ratio reached a 16-month low of 18.7% as of Oct. 15, said an article published today by Standard & Poor's, titled "U.S. Distressed Debt Monitor: Distress Ratio Drops Below 20% In October (Premium)." This is down from 23.5% in September.
"The decrease in distress is coincident with movement in corporate bond spreads," said Diane Vazza, head of Standard & Poor's Global Fixed Income Research Group. "The speculative-grade corporate bond spread was at 709 basis points on Oct. 15, down from 777 basis points a month earlier."
Standard & Poor's distress ratio is defined as the number of distressed securities divided by the total number of speculative-grade-rated issues. Distressed credits are speculative-grade-rated issues that have option-adjusted spreads of more than 1,000 basis points relative to Treasuries.
Following alongside the recent activity in the corporate universe, distress in leveraged loans has experienced a slight decrease as well, with the S&P/LSTA Leveraged Loan Index distress ratio falling to 25.7% in September from 31.1% in August.
Among distressed bonds, the total number of companies with issues trading with spreads of 1,000 basis points and higher is currently 151, down from 193 in September.
The standard version of this article is part of our standard Global Fixed Income Research content. The premium version contains expanded analysis of the article's most significant points, typically broken out by sector and region. Also in the premium version are in-depth charts and tables, the underlying data of which are available for download. Ratings information can also be found on Standard & Poor's public Web site at www.standardandpoors.com; under Ratings in the left navigation bar, select Find a Rating. Members of the media may request a copy of this report by contacting the media representative provided.
Media Contact:
Mimi Barker, New York (1) 212-438-5054, [email protected]
Analyst Contact:
Diane Vazza, New York (1) 212-438-2760