Bangkok--5 Feb--Standard & Poor's
In 2008, corporate yields rose significantly for investment-grade companies, while speculative-grade issuers were essentially frozen out of the bond market. What a difference a year makes. The combination of monetary accommodation and an improved economic outlook spurred a rally in risky assets in 2009, said an article published today by Standard & Poor's.
In the article, titled "U.S. Refinancing Study: Financial Debt Dominates The 2010-2011 Maturity Schedule, But Low-Rated Nonfinancial Issuers Are At The Most Risk (Premium)," Standard & Poor's Global Fixed Income Research investigates the potential refunding needs of corporate financial and nonfinancial debt.
"New issue yields on investment-grade nonfinancial debt declined by more than 2.5% by the third quarter of 2009 from their peak in the fourth quarter of 2008," said Diane Vazza, head of Standard & Poor's Global Fixed Income Research. "This allowed investment-grade issuers to refinance bond issues at or below precrisis yields."
After a rough first-quarter 2009, speculative-grade companies regained access to the bond market. High-yield bond issues totaled $131 billion during the year, the fourth-highest total on record.
"The near-term maturity schedule appears manageable," said Ms. Vazza. "Corporate debt maturities will total $480 billion in 2010 and $568 billion in 2011."
In 2012, approximately $724 billion in debt will come due, largely as a result of financial maturities tied to the Temporary Liquidity Guarantee Program and a rise in speculative-grade debt maturities. Speculative-grade refinancing needs in 2012-2014 likely will pose a significant hurdle as approximately $850 billion in debt comes due.
This article is part of our premium Global Fixed Income Research content, which is available to premium subscribers to RatingsDirect on the Global Credit Portal at www.globalcreditportal.com and to RatingsDirect at www.ratingsdirect.com. 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:
David Wargin, New York (1) 212-438-1579,
[email protected]
Analyst Contact:
Diane Vazza, New York (1) 212-438-2760