Bangkok--11 Nov--Standard & Poor's
Standard & Poor's investment-grade composite spread tightened marginally yesterday to 222 basis points (bps), while its speculative-grade counterpart remained unchanged at 703 bps. By rating, the 'AA' spread tightened 2 bps to 147 bps, 'A' compressed one basis point to 187 bps, 'BBB' tightened 2 bps to 277 bps, 'BB' compressed one basis point to 504 bps, 'B' widened one basis point to 685 bps, and 'CCC' tightened one basis point to 1,104 bps.
Most of the industry spreads tightened, with financial institutions and telecommunications tightening by the largest increment of 2 bps each to 381 bps and 331 bps, respectively. Banks and industrials followed, compressing one basis point each to 299 bps and 360 bps, respectively, and utilities remained unchanged at 215 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