Bangkok--30 Jun--Standard & Poor's
Standard & Poor's investment-grade and speculative-grade composite spreads expanded yesterday to 205 basis points (bps) and 670 bps, respectively. By rating, the 'AA' spread widened one basis point to 138 bps and 'A' and 'BBB' remained unchanged at 176 bps and 250 bps, respectively. The 'BB' spread expanded 7 bps to 505 bps, 'B' widened 6 bps to 700 bps, and 'CCC' expanded 8 bps to 964 bps.
By industry, telecommunications expanded 2 bps to 323 bps, and banks and industrials widened one basis point each to 289 bps and 327 bps, respectively. Financial institutions and utilities remained unchanged at 304 bps and 207 bps, respectively.
After Standard & Poor's investment-grade and speculative-grade composite spreads reached two-year lows at the end of April of 156 bps and 553 bps, respectively, spreads have widened considerably. The speculative-grade composite spread is currently 16% wider than its five-year moving average of 570 bps, and its investment-grade counterpart has widened 1% from its five-year moving average of 197 bps. We expect continued volatility in the near term, especially in the speculative-grade segment, which could result from both positive and negative factors. On the positive side, economic growth in the U.S. likely will continue to support stabilization of credit quality. On the negative side, an increase in volatility in the financial markets, influenced partially by European debt problems, could continue to weigh on risky assets.
Media Contact:
Mimi Barker, New York (1) 212-438-5054,
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Analyst Contact:
Diane Vazza, New York (1) 212-438-2760