Bangkok--27 Oct--Standard & Poor's
Both Standard & Poor's investment-grade and speculative-grade composite spreads tightened on Friday, to 224 basis points (bps) and 685 bps, respectively. By rating, the 'AA' spread tightened 2 bps to 149 bps; 'A' tightened one basis point to 189 bps; 'BBB' compressed 2 bps to 282 bps; 'BB' and 'B' tightened 7 bps each to 489 bps and 662 bps, respectively; and 'CCC' compressed 10 bps to 1,085 bps.
Spreads tightened marginally across industries as well, with banks, industrials, and telecommunications tightening 3 bps each to 305 bps, 363 bps, and 322 bps, respectively, and financial institutions and utilities tightening one basis point each to 379 bps and 216 bps, respectively.
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:
Mimi Barker, New York (1) 212-438-5054, [email protected]
Analyst Contact:
Diane Vazza, New York (1) 212-438-2760
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