Bangkok--22 Sep--Standard & Poor's
After getting off to a healthy start in 2010, the pace of the economic recovery has been progressing slowly. Credit market indicators in the U.S. seem mixed, though most are improving, said an article published today by Standard & Poor's, titled "U.S. Distressed Debt Monitor (Premium)."
"As a result, the speculative-grade corporate spread has leveled off and remains consistent with a recession," said Diane Vazza, head of Standard & Poor's Global Fixed Income Research. "After hitting a low of 537 bps on April 26, the speculative-grade corporate bond spread widened to 641 bps as of Sept. 15. Along with this, the distress ratio fell slightly, to 11.8% as of Sept. 15 from 12.4% this past month."
Standard & Poor's distress ratio is defined as the number of distressed securities divided by the total number of speculative-grade-rated issues. Distressed credits are speculative-grade-rated issues that have option-adjusted spreads of more than 1,000 bps relative to Treasuries.
Both the corporate and leveraged loan distress ratios held steady in August. The S&P/LSTA Leveraged Loan Index distress ratio remained at 9.6% at the end of August, unchanged from the previous month.
Among distressed bonds, the total number of companies with issues trading with spreads of 1,000 bps and higher is currently 115. This is five fewer than the total in August. Along with this, the count of affected issues decreased to 166 as of Sept. 15 from 175 in August.
With a slight decrease in the distress ratio, the amount of affected debt also fell--to $65.3 billion from $69.5 billion this past month.
The standard version of this article is part of our standard Global Fixed Income Research content. The premium version contains expanded analysis of the article's most significant points, typically broken out by sector and region. Also in the premium version are in-depth charts and tables, the underlying data of which are available for download. 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:
Mimi Barker, New York (1) 212-438-5054,
[email protected]
Analyst Contact:
Diane Vazza, New York (1) 212-438-2760