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TEXT-S&P speculative-grade composite spread narrows to 616 bps
March 14, 2012 / 2:47 PM / 6 years ago

TEXT-S&P speculative-grade composite spread narrows to 616 bps

March 14 - Standard & Poor's investment-grade composite spread
remained unchanged at 201 basis points (bps) yesterday, and the
speculative-grade composite spread narrowed by 8 bps to 616 bps. By rating, the
'AA' spread remained unchanged at 133 bps, and 'A' and 'BBB' contracted by 1 bp
each to 174 bps and 248 bps, respectively. The 'BB' spread tightened by 5 bps to
438 bps, 'B' tightened by 8 bps to 667 bps, and 'CCC' narrowed by 9 bps to 1,037
bps.	
	
By industry, financial institutions and industrials remained flat at 304 bps 	
and 292 bps, respectively. Banks tightened by 2 bps to 322 bps. Utilities 	
expanded by 1 bp to 205 bps, and telecommunications contracted by 1 bp to 320 	
bps.	
	
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 196 bps and below its five-year moving average of 238 bps. 	
The speculative-grade composite spread is below both its one-year moving 	
average of 632 bps and its five-year moving average of 717 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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