Bangkok--19 Nov--Standard & Poor's
Standard & Poor's investment-grade composite spread widened marginally yesterday by one basis point to 222 basis points (bps), while its speculative-grade counterpart tightened 5 bps to 700 bps. By rating, the 'AA' spread expanded 2 bps to 151 bps; 'A', 'BBB', 'BB', and 'B' remained unchanged at 188 bps, 276 bps, 512 bps, and 692 bps, respectively; and 'CCC' tightened 6 bps to 1,100 bps.
Industry spreads were marginally wider for banks, utilities, and telecommunications, which expanded to 305 bps, 216 bps, and 335 bps, respectively. Financial institution and industrial spreads remained unchanged at 383 bps and 356 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.
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