Bangkok--11 Dec--Standard & Poor's
Standard & Poor's investment-grade and speculative-grade composite spreads tightened marginally yesterday to 215 basis points (bps) and 675 bps, respectively. By rating, the 'AA' spread remained unchanged at 147 bps, 'A' tightened one basis point to 184 bps, 'BBB' tightened 2 bps to 270 bps, 'BB' tightened 4 bps to 501 bps, 'B' tightened 5 bps to 674 bps, and 'CCC' tightened 6 bps to 1,058 bps.
By industry, banks tightened by the largest margin of 4 bps to 301 bps, followed by industrials and telecommunications, which tightened 2 bps each to 346 bps and 327 bps, respectively. Financial institutions and utilities tightened one basis point each to 374 bps and 216 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