Bangkok--6 Nov--Standard & Poor's
Standard & Poor's investment-grade composite spread remained unchanged yesterday at 224 basis points (bps), while its speculative-grade counterpart tightened marginally to 700 bps. By rating, the 'AA' spread expanded one basis point to 152 bps, 'A' remained unchanged at 188 bps, and 'BBB' widened one basis point to 280 bps. The 'BB' spread tightened 2 bps to 502 bps, 'B' tightened 3 bps to 678 bps, and 'CCC' compressed 2 bps to 1,110 bps.
Industry spreads remained largely unchanged, with financial institutions, banks, utilities, and telecommunications remaining at Tuesday's levels of 384 bps, 301 bps, 216 bps, and 331 bps, respectively. Industrials expanded one basis point to 363 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:
Mimi Barker, New York (1) 212-438-5054, [email protected]
Analyst Contact:
Diane Vazza, New York (1) 212-438-2760