Bangkok--15 Sep--Standard & Poor's
Upgrades have outpaced downgrades in the U.S. high-yield segment every month in 2010--except for July. Positive rating actions bounced back in August, with a total of 21 upgrades and 12 downgrades during the month. This brings the total number of ratings actions to 171 upgrades and 111 downgrades in the first eight months of 2010, said an article published today by Standard & Poor's, titled "After The Midsummer Blues, The U.S. High-Yield Market Is Seeing Some Positive Signs."
"Reasons for the increase in upgrades include stronger operating performance, repayment of debt, higher profits, and improved credit metrics," said Diane Vazza, head of Standard & Poor's Global Fixed Income Research. "This is good news for the U.S. speculative-grade segment, which has been saddled with significant economic uncertainties, including a lack of improvement in employment, inconsistent financial regulation across the globe, and inadequate government stimulus because of rising deficits, which continue to concern investors."
In addition, credit quality generally appears to be stabilizing, companies are beginning to deleverage, and most new issuance is due to refinancing instead of taking on more debt. As such, new issuance resumed in the speculative-grade market in August, with a total of 44 new issues worth $21.5 billion. This was double the total number of issues in July.
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Media Contact:
Mimi Barker, New York (1) 212-438-5054,
[email protected]
Analyst Contacts:
Diane Vazza, New York (1) 212-438-2760