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Global Leveraged Finance And Recovery Ratings
Welcome to Standard & Poor’s Recovery Ratings. The purpose of this page is to give you easy access to the most important recent documents related to our work on recovery and links to other sites related to leveraged loans.
Recovery Update
Recovery Update: February 2012
Under our base case shallow recession scenario for 2012, we consider country risk, rather than more typical cyclical factors, should drive the credit fortunes of our European rated corporates in the coming year, in Standard & Poor's Ratings Services' view. According to our recently published corporate credit outlook, "Eurozone Risks Will Weigh On Corporates If They Can't Find Growth Globally," as sovereigns in the European Economic and Monetary Union (EMU or eurozone) struggle to reduce debt while supporting growth, we anticipate that companies reliant on localized operations in countries hardest hit by weak consumer demand and austerity measures will be most exposed to negative rating developments. Looking ahead, internationally oriented multinational and exporting companies on the other hand, often have greater financial flexibility and should be able to maintain their rating levels.
In the U.S., however, our recent research takes a look back at the history of speculative-grade credit in the region. Our report, "Born This Way: Acceptance Grows For New Speculative-Grade Companies Through 30 Years Of LBOs, Bank Loans, And Falling Interest Rates," states that Since 1981, the number of U.S.-based 'AAA' rated nonfinancial companies has dropped from 61 to four, while the number of speculative-grade companies (those rated 'BB+' and lower) has risen to more than half 2,902 U.S.-rated companies. Currently, 64%, or 1,421, of nonfinancial ratings in the U.S. are classified as speculative grade. This explosion of lower-rated debt has helped fuel growth in many industries. At the same time, some blame the vast leverage that resulted from the growth in speculative-grade debt as one of the key factors in the credit crisis that erupted in 2008, and from which the world economy is still suffering. |
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