January 22, 2013 / 3:37 PM / 5 years ago

TEXT - S&P says retail sector spreads tighten amid sales growth

(The following statement was released by the rating agency)

Jan 22 - Towards the end of 2012 the retail sector displayed an increase in growth, according to a recently published Standard & Poor's Ratings Services report titled, Retail Sector Spreads Tighten Amid Sales Growth. "According to the Commerce Department, the retail sector grew by 0.4% in November, followed by 0.5% in December," said Diane Vazza, head of Standard & Poor's Global Fixed Income Research. Combined with lower unemployment and the holiday season, the retail sector spread has concurrently exhibited a general tightening, from a maximum of 295 basis points (bps) to a minimum of 282 bps. In the first weeks of 2013 the spreads have continued to tighten, bottoming out at 269 bps. Speculative-grade issuance has decreased from $6.4 billion to $2.4 billion over the past week as the spreads have tightened by 2 bps to 534 bps. The speculative-grade spread is tighter than both its one-year moving average of 635 bps and its five-year moving average of 758 bps. Investment-grade issuance has also decreased, from $16.6 billion to $7.5 billion over the past week, as the spreads have widened by 1 bp to 180 bps. The investment grade spread is tighter than both its one-year moving average of 201 bps and its five-year moving average of 246 bps. Over the past week, the Credit Default Swap North America High Yield Index spread widened by 1 bp to 446 bps, and it is wider than it was at the start of the year when it was 439 bps. The Credit Default Swap North America Investment Grade Index widened by 1 bp to 128 bps, and it is tighter than it was at the start of the year when it was 136 bps. (Caryn Trokie, New York Ratings Unit)

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