Bangkok--16 Apr--Standard & Poor's
Standard & Poor's Ratings Services said in a published report that many investment-grade and near investment-grade nonfinancial corporate issuers increased their debt leverage during the first quarter of 2010 to pursue growth. Conversely, lower rated speculative-grade nonfinancial corporate entities sought to deleverage in order to repair their marginal credit profiles. The article is titled "As Some U.S. Corporate Issuers Move To Unload Debt, Others Load Up To Pursue Growth."
"We are seeing a bit of releveraging on the part of relatively stronger issuers," said Standard & Poor's credit analyst Andrew Watt. "At the lower end of speculative grade, deleveraging is necessary because many issuers' debt burdens are unsustainable and severely limit their business prospects."
An examination of ratings activity for the first quarter supports these trends. In the investment-grade category, downgrades outpaced upgrades by a nearly 3:2 rate. Among speculative-grade companies, upgrades dominated downgrades at about a 2:1 pace. Almost two-thirds of the upgrades in the first quarter were in the 'B' category or below.
"A closer look at the ratings activity for investment-grade or near investment-grade issuers shows that about half of the downgrades in this category were due to a merger or acquisition," said Mr. Watt.
The report is available to RatingsDirect on the Global Credit Portal subscribers at www.globalcreditportal.com and RatingsDirect subscribers at www.ratingsdirect.com. If you are not a RatingsDirect subscriber, you may purchase a copy of the report by calling (1) 212-438-7280 or sending an e-mail to
[email protected]. 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:
Andrew Watt, CFA, New York (1) 212-438-7868
Key Contacts:
Americas Media Relations: (1) 212-438-6667
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