October 10, 2012 / 8:51 PM / 5 years ago

TEXT-S&P speculative-grade composite spread narrows

Oct 10 - Standard & Poor's investment-grade composite spread widened by 4
basis points (bps) to 188 bps yesterday, and the speculative-grade composite
spread tightened by 1 bp to 605 bps. By rating, the 'AA' spread widened by 3 bps
to 125 bps, the 'A' spread widened by 4 bps to 160 bps, and the 'BBB' spread
widened by 3 bps to 228 bps. The 'BB' spread remained flat at 414 bps, the 'B'
spread tightened by 2 bps to 628 bps, and the 'CCC' spread tightened by 2 bps to
1,001 bps. 

By industry, financial institutions expanded by 3 bps to 267 bps, and banks 
remained flat at 255 bps. Industrials and telecommunications expanded by 2 bps 
each to 269 bps and 290 bps, respectively, and utilities expanded by 4 bps to 
197 bps.

The investment-grade and speculative-grade spreads are both down from their 
highs reached last October. The investment-grade composite spread is lower 
than both its one-year moving average of 211 bps and its five-year moving 
average of 246 bps. The speculative-grade composite spread is lower than both 
its one-year moving average of 672 bps and its five-year moving average of 752 
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.

Our Standards:The Thomson Reuters Trust Principles.
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below