Bangkok--2 Dec--Standard & Poor's
Standard & Poor's investment-grade and speculative-grade composite spreads widened yesterday to 223 basis points (bps) and 709 bps, respectively. By rating, the 'AA' spread widened 2 bps to 153 bps; 'A' and 'BBB' expanded 3 bps each to 191 bps and 278 bps, respectively; 'BB' widened 11 bps to 527 bps; 'B' expanded 13 bps to 705 bps; and 'CCC' widened 14 bps to 1,102 bps.
Banks and telecommunications widened the most by industry, expanding 5 bps each to 315 bps and 343 bps, respectively. Industrials followed, expanding 4 bps to 358 bps, trailed by financial institutions and utilities, which widened 2 bps each to 381 bps and 219 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.
Media Contact:
Mimi Barker, New York (1) 212-438-5054,
[email protected]
Analyst Contact:
Diane Vazza, New York (1) 212-438-2760