S&P: Distressed Ratio Rises to 12.7%
February 26, 2010
The distressed debt ratio increased to reach 12.7% this month but is still below its long-term average, Standard & Poor’s reported Thursday. Distressed levels in leveraged loans declined for January.
The distressed ratio for speculative-grade corporate bonds moved up to 12.7% in February from 10.4% in January. The high yield corporate spread is now at 674 bps, lower than at any point last year. The amount of affected debt increased to $62.1 billion from $40.3 billion.
The distressed ratio in speculative-grade loans fell to 15.6% in January from 18.9% in December.
“After a protracted period of economic and financial stress that began it he second half of 2007, credit conditions appear favorable in the first few months of 2010,” said S&P analysts in the report.
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