TEXT-S&P: spreads patterns of 2012 contradict 2011
Dec 4 - As we near the end of 2012, a look back at spreads through the first three quarters paints a different picture compared to what occurred in 2011, according to a recently published Standard & Poor's Ratings Services report titled, "Spreads Patterns Of 2012 Contradict 2011. "In 2012, both the high yield and investment-grade composite spreads tightened to 617 basis points from 709 and to 193 from 223, respectively. By comparison, through September 2011 the speculative-grade composite spread widened to 781 basis points from 538, and the investment-grade composite spread to 227 from 177," said Diane Vazza, head of Standard & Poor's Global Fixed Income Research. In September 2012, speculative-grade issuance peaked at $34.9 billion, as yield-hungry investors flocked towards the asset class. In addition, although concerns over the eurozone's financial stability persist, the region's economic volatility is not at the same level as it was in 2011, when the spreads widened. Speculative-grade issuance has increased to $1.4 billion from $400 million over the past week as the spreads have tightened by 1 bp to 610. The speculative-grade spread is tighter than both its one-year moving average of 656 bps and its five-year moving average of 759 bps. Investment-grade issuance has increased to $23.6 billion from $3.6 billion over the past week, as the spreads have widened by 2 bps to 188. The investment-grade spread is tighter than both its one-year moving average of 207 bps and its five-year moving average of 247 bps. Over the past week, the Credit Default Swap North America High Yield Index spread has tightened by 9 bps to 509, and it's tighter than it was at the start of the year when it was 662 bps. The Credit Default Swap North America Investment Grade Index has widened by 2 bps to 141, and it is wider than it was at the start of the year when it was 138 bps. The report is available to subscribers of RatingsDirect on the Global Credit Portal at www.globalcreditportal.com. If you are not a RatingsDirect subscriber, you may purchase a copy of the report by calling (1) 212-438-7280 or sending an e-mail to email@example.com. 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.