632 Global

632 Global Entities At Risk Of Downgrade As Of Mid-September 2005, S&P Says

"By sector, telecommunications, consumer products, and automotive appeared the most vulnerable to deterioration in credit quality," noted Diane Vazza, head of Standard & Poor's Global Fixed Income Research Group. "Indeed, in all three sectors, the proportion of issuers listed with a negative bias (i.e. negative outlook or a CreditWatch with negative implications) are currently at more elevated levels than has historically been recorded, highlighting the risks to credit quality."

The article, titled "Downgrade Potential Across Credit Grades And Sectors," also said oil and gas exploration and production appeared vulnerable as well. The retail/restaurant sector displayed a relatively high propensity for downgrades, even though negative bias remains in line with the historical average. The fact that borrowing costs have not budged meaningfully from favorable lows, notwithstanding the turnaround in short-term benchmark rates, undoubtedly remains a favorable factor for many issuers. At the other end, among industrial issuers listed with a negative bias, metals and mining appeared least vulnerable, with only 8% of total issuers listed with a negative bias.

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