TEXT-S&P speculative-grade composite spread narrows

Jan 8 - Standard & Poor's investment-grade composite spread tightened by 1
basis point (bp) to 178 bps yesterday, and the speculative-grade composite
spread contracted by 3 bps to 536 bps. By rating, the 'AA' spread remained flat
at 122 bps, and the 'A', 'BBB', and 'BB' spreads contracted by 1 bp each to 150
bps, 213 bps, and 360 bps, respectively. The 'B' spread tightened by 3 bps to
559 bps, and the 'CCC' spread narrowed by 2 bps to 893 bps.

By industry, utilities remained flat at 184 bps, and financial institutions,
banks, industrials, and telecommunications contracted by 1 bp each to 237 bps,
226 bps, 246 bps, and 266 bps, respectively.

The investment-grade composite spread is lower than both its one-year moving
average of 202 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 639 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.