(UBS) Further monetary tightening and curve flattening will have

Corporate Market Update:

June 22 - UBS
Further monetary tightening and curve flattening will have

Credit markets have continued to build on the rally that began late
last month. After narrowing about 8 basis points in the final week of
May, investment-grade spreads to treasuries have tightened another 5
basis points so far this month.

UBS continues to forecast further monetary tightening and curve
flattening, which are likely to have a negative impact on credit
markets. However, still strong profit growth has helped support
corporate balance sheets. Spreads are also trading within fair value
range, in our opinion, which suggests that the market will likely be
well-supported near term.

Credit Focus: Ford changed to Market Perform:

UBS' opinion on F was changed to Market Perform from Underperform as a result of a number of positive developments including the agreement with Visteon and an improvement in technical conditions. "We prefer FMC to F bonds and bonds maturing not later than 2010. F has a UBS Credit Rating of BBB- and a Deteriorating Credit Trend. The investor's risk tolerance profile is key for F/FMC bonds."