Bangkok--10 Sep--Standard & Poor's
Standard & Poor's Global Fixed Income Research has published its most recent "Stress In Corporate America" report. In this report, we use three of our preexisting research criteria--weakest links, potential bond downgrades, and the distressed report--to identify and spotlight U.S. sectors that we believe are currently subject to the highest levels of credit stress.
In light of sluggish consumer demand and uncertainty about economic and credit market conditions, the media and entertainment, oil and gas exploration and production, and retail and restaurant sectors were the most negatively affected as of Aug. 27, 2010, according to the article titled "Stress In Corporate America: Lackluster Consumer Sentiment And Environmental Disaster Weigh On Stressed Sectors (Premium)."
These sectors consistently have the highest levels of risk among our lists of distressed companies, weakest links, and potential bond downgrades.
"We identified 120 companies in these three sectors that meet at least one of these criteria," said Diane Vazza, head of Standard & Poor's Global Fixed Income Research. "Of these, 21 are on more than one list, indicative of even higher vulnerability. Four companies are featured on all three lists."
"Over the past 12 months, downgrades represented 55% of all rating actions in the media and entertainment sector, 50% of those within the oil and gas sector, and 42.5% within the retail and restaurants sector," said Ms. Vazza. By comparison, within overall U.S. nonfinancials this figure is 44.6%.
In addition, as of Aug. 27, 2010, the three stressed sectors accounted for about 40.4% of the issuers listed as weakest links and about 41.6% of the total defaulters in 2010.
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