Bangkok--1 Dec--Standard & Poor's
The number of global issuers poised for downgrades declined to 869 in November from 890 in the previous month, said an article published Wednesday, November25, 2009 by Standard & Poor's, titled "Downgrade Potential Across Credit Grades And Sectors (Premium)." This owes largely to an increase in the number of companies downgraded and assigned stable outlooks.
Potential downgrades are defined as entities that have either a negative outlook or ratings on CreditWatch with negative implications across rating categories 'AAA' to 'B-'.
Despite materialized downgrades throughout all sectors, banks displayed the highest downgrade propensity, closely followed by media and entertainment, insurance, consumer products, and transportation.
Other sectors, including chemicals, packaging, and environmental services and utilities, have begun to show signs of stabilization following a large number of downgrades.
"This migration from systemic risk, when all sectors are negatively affected, to sectoral risk, when the sectors most reliant on broad economic improvement are negatively affected, is a normal occurrence at the end of a recession and the beginning of a new credit cycle," said Diane Vazza, head of Standard & Poor's Global Fixed Income Research Group.
Geographically, the U.S. continues to top the list of potential bond downgrades, with roughly 53% of current ratings showing downside risk (followed by Europe, with 23%).
The standard version of this article is part of our standard Global Fixed Income Research content. The premium version contains expanded analysis of the article's most significant points, typically broken out by sector and region. Also in the premium version are in-depth charts and tables, the underlying data of which are available for download. Ratings information can also be found on Standard & Poor's public Web site by using the Ratings search box located in the left column at www.standardandpoors.com. Members of the media may request a copy of this report by contacting the media representative provided.
Media Contact:
Mimi Barker, New York (1) 212-438-5054,
[email protected]
Analyst Contact:
Diane Vazza, New York (1) 212-438-2760