Dec 4 - With the U.S. elections out of the way, investors' attention has
shifted to the uncertainty surrounding the fiscal cliff. Moreover, despite some
positive economic data, some of the cyclical sectors in the U.S. continue to
struggle, said an article published today by Standard & Poor's Global Fixed
Income Research, titled "Stressed Sectors In Corporate America: The Media And
Entertainment, Oil And Gas, And Retail And Restaurants Sectors Account For About
Half Of The 2012 Defaults." In the report, we use three of our research
publications--weakest links, potential bond downgrades, and the distressed debt
monitor--to identify and spotlight the U.S. sectors we believe are currently
subject to the highest levels of credit stress.
"The media and entertainment, oil and gas, and retail and restaurant sectors
are the most troubled sectors in the U.S.," said Diane Vazza, head of Standard
& Poor's Global Fixed Income Research. In October, companies in these sectors
had the highest risk among distressed issuers (speculative-grade companies
with securities trading in excess of 1,000 basis points above U.S.
Treasuries), weakest links (companies rated 'B-' or lower with negative
outlooks or ratings on CreditWatch with negative implications), and potential
bond downgrades (investment- or speculative-grade companies with negative
rating outlooks or ratings on CreditWatch negative). "These sectors accounted
for 19 of the 41 U.S. defaults in 2012 (through Nov. 20)," said Ms. Vazza.
"Moreover, the speculative-grade corporate default rates for these three
sectors are significantly higher than the overall default rate of 2.8% as of
Oct. 31, 2012."
We identified 107 companies in these sectors that meet at least one of the
criteria. In our regular monthly articles ("U.S. Distressed Debt Monitor,"
"Global Weakest Links And Default Rates," and "Bond Downgrade Potential"), we
include full lists of all companies that meet the criteria.
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.