April 5, 2012 / 2:27 PM / 5 years ago

TEXT-S&P speculative-grade composite spread widens

April 5 - Standard & Poor's investment-grade composite spread widened by 11
basis points (bps) to 205 bps yesterday, and the speculative-grade composite
spread widened by 4 bps to 622 bps. By rating, the 'AA' spread widened by 11 bps
to 136 bps, and 'A' and 'BBB' widened by 12 bps each to 178 bps and 253 bps,
respectively. The 'BB' spread widened by 4 bps to 444 bps, 'B' widened by 5 bps
to 672 bps, and 'CCC' widened by 6 bps to 1,033 bps.	
	
By industry, financial institutions and telecommunications expanded by 10 bps 	
each to 310 bps and 328 bps, respectively. Banks, industrials, and utilities 	
expanded 11 bps each to 314 bps, 299 bps, and 210 bps, respectively.	
	
The investment-grade and speculative-grade spreads are both down from their 	
highs reached in October. The investment-grade spread is above its one-year 	
moving average of 198 bps and below its five-year moving average of 239 bps. 	
The speculative-grade composite spread is below both its one-year moving 	
average of 639 bps and its five-year moving average of 721 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, we expect U.S. corporate defaults to remain below the long-term 	
average in the short term. On the negative side, an increase in volatility in 	
the financial markets, influenced by weakening economic conditions, could 	
continue to weigh on risky assets.	
	
Standard & Poor's, a part of The McGraw-Hill Companies (NYSE:MHP), is the 	
world's foremost provider of credit ratings. With offices in 23 countries, 	
Standard & Poor's is an important part of the world's financial infrastructure 	
and has played a leading role for 150 years in providing investors with 	
information and independent benchmarks for their investment and financial 	
decisions.

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