Bangkok--12 Nov--Standard & Poor's
Standard & Poor's investment-grade composite spread expanded one basis point yesterday to 223 basis points (bps), while its speculative-grade counterpart tightened 2 bps to 701 bps. By rating, the 'AA' and A' spreads expanded one basis point each to 148 bps and 188 bps, respectively; 'BBB' and 'BB' remained unchanged at 277 bps and 504 bps, respectively; and 'B' and 'CCC' tightened 2 bps each to 683 bps and 1,102 bps, respectively.
Spreads were largely unchanged by industry, with financial institutions, industrials, utilities, and telecommunications remaining at Monday's levels of 381 bps, 360 bps, 216 bps, and 331 bps, respectively. Bank spreads expanded one basis point to 300 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,
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Analyst Contact:
Diane Vazza, New York (1) 212-438-2760
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