Reuters: Market News: S&P speculative-grade composite spread widens

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S&P speculative-grade composite spread widens Apr 9th 2012, 16:53 Mon Apr 9, 2012 12:53pm EDT April 9 - Standard & Poor's investment-grade composite spread widened by 6 basis points (bps) to 214 bps Friday, and the speculative-grade composite spread widened by 13 bps to 642 bps. By rating, the 'AA' spread widened by 5 bps to 145 bps, and 'A' and 'BBB' widened by 6 bps each to 187 bps and 261 bps, respectively. The 'BB' spread widened by 11 bps to 462 bps, 'B' widened by 12 bps to 690 bps, and 'CCC' widened by 15 bps to 1,056 bps. By industry, financial institutions, industrials, and utilities expanded by 6 bps each to 319 bps, 308 bps, and 219 bps, respectively. Banks and telecommunications expanded by 7 bps each to 325 bps and 338 bps, respectively. The investment-grade and speculative-grade spreads are both down from their highs reached in October. The investment-grade spread is above its one-year moving average of 198 bps and is below its five-year moving average of 239 bps. The speculative-grade composite spread is above its one-year moving average of 641 bps and below its five-year moving average of 721 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. Link this Share this Digg this Email Reprints

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