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Investment-Grade Composite Spread Tightens To 223 Basis Points

Publication date: 09-Nov-2009 10:20:01 EST


NEW YORK (Standard & Poor's) Nov. 9, 2009--Standard & Poor's investment-grade 
and speculative-grade composite spreads tightened on Friday to 223 basis 
points (bps) and 703 bps, respectively. By rating, the investment-grade 
spreads compressed an average of 7 bps, with 'AA' tightening to 149 bps, 'A' 
to 188 bps, and 'BBB' to 279 bps. In the speculative-grade domain, the 'BB' 
and 'B' spreads compressed 9 bps each to 505 bps and 684 bps, respectively, 
while 'CCC' compressed 27 bps to 1,105 bps.
     Industry spreads compressed across the board as well, with industrials 
tightening by the largest increment of 11 bps to 362 bps. Financial 
institutions followed, tightening 9 bps to 382 bps, trailed by banks, which 
tightened 8 bps to 300 bps. Utilities compressed 7 bps to 216 bps and 
telecommunications compressed 6 bps to 334 bps.
     Despite material tightening since their record highs in December 2008, 
the speculative-grade spread remains range-bound within a default cycle, and 
the investment-grade spread continues to face pressure from financial 
institutions and banks. In addition, speculative-grade defaults continue to 
accelerate, as does the preponderance of credit downgrades. Because of these 
factors, we expect spreads to remain at their elevated levels for some time as 
investors, the credit markets, and the economy cautiously tread through the 
current recessionary period.


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Global Fixed Income Research:Diane Vazza, Managing Director, New York (1) 212-438-2760;
diane_vazza@standardandpoors.com
Media Contact:Mimi Barker, New York (1) 212-438-5054;
mimi_barker@standardandpoors.com

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