TEXT-S&P speculative-grade composite spread narrows

Fri Nov 30, 2012 1:25pm EST

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Nov 30 - Standard & Poor's investment-grade composite spread remained flat
at 188 basis points (bps) yesterday, and the speculative-grade composite spread
tightened by 5 bps to 605 bps. By rating, the 'AA', 'A', and 'BBB' spreads
remained flat at 129 bps, 159 bps, and 224 bps, respectively. The 'BB' and 'B'
spreads contracted by 4 bps each to 407 bps and 620 bps, respectively, and the
'CCC' spread narrowed by 6 bps to 988 bps.

By industry, financial institutions remained flat at 252 bps, and industrials 
and banks contracted by 1 bp each to 267 bps and 248 bps, respectively. 
Utilities widened by 1 bp to 192 bps, and telecommunications tightened by 3 
bps to 289 bps.

The investment-grade composite spread is lower than both its one-year moving 
average of 206 bps and its five-year moving average of 247 bps. The 
speculative-grade composite spread is lower than both its one-year moving 
average of 655 bps and its five-year moving average of 759 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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