Bangkok--18 Nov--Standard & Poor's
Standard & Poor's investment-grade composite spread tightened marginally yesterday, compressing one basis point to 221 basis points (bps), while its speculative-grade counterpart expanded 6 bps to 705 bps. By rating, the 'AA', 'A', and 'BBB' spreads remained unchanged at 149 bps, 188 bps, and 276 bps, respectively. The 'BB' and 'B' spreads widened 6 bps each to 512 bps and 692 bps, respectively, and 'CCC' widened 7 bps to 1,106 bps.
Industry spreads were largely unchanged yesterday, with financial institutions, banks, utilities, and telecommunications remaining at Friday's levels of 383 bps, 303 bps, 215 bps, and 334 bps, respectively. Industrials tightened 2 bps to 356 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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