Bangkok--20 Nov--Standard & Poor's
Standard & Poor's investment-grade and speculative-grade composite spreads tightened yesterday to 220 basis points (bps) and 692 bps, respectively. Spreads tightened across the board by rating as well, with the investment-grade spreads compressing an average of 2 bps, to 149 bps for 'AA', 187 bps for 'A', and 274 bps for 'BBB'. The speculative-grade spreads tightened an average of 8 bps, to 507 bps for 'BB', 684 bps for 'B', and 1,089 bps for 'CCC'.
By industry, financial institutions and industrials tightened by the largest increment of 3 bps each, to 380 bps and 353 bps, respectively. Telecommunications followed, tightening 2 bps to 334 bps. Utilities tightened one basis point to 215 bps and banks remained unchanged at 305 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