3 Min Read
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.