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.