TEXT-S&P 500 rising stars perform despite downgrade ratio

(The following statement was released by the rating agency)

Oct 5 - The credit profiles of rated companies in the S&P 500 Index weakenedslightly in third-quarter 2012, as downgrades outnumbered upgrades by more thantwo to one, said an article published today by Standard & Poor's Global FixedIncome Research, titled "S&P 500 Credit Profile: Rising Stars Shine DespiteIncreasing Downgrade Activity In Third-Quarter 2012."

During this time, Standard & Poor's Ratings Services downgraded 13 companiesand upgraded six. The number of downgrades showed a marked increase from thesecond quarter, when only five companies were downgraded. Among the sixupgraded companies, we saw three companies upgraded to investment grade fromspeculative grade. These new rising stars are Flowserve Corp. (FLS), WholeFoods Market Inc. (WFM), and Harman International Industries Inc. (HAR).

"We expect that downgrades may outnumber upgrades in the next three months totwo years, since rating outlooks and CreditWatch statuses show a slightlynegative bias," said Diane Vazza, head of Standard & Poor's Global FixedIncome Research.

The companies in the S&P 500 Index are predominantly investment grade and showstronger credit measures than the average rated U.S. company (see "S&P 500Credit Profile: Upgrades Outnumber Downgrades In Second-Quarter 2012,"published July 6, 2012, on RatingsDirect). Standard & Poor's rates 87% of thecompanies in the S&P 500 Index. Of these rated companies, 87% are consideredinvestment grade (rated 'BBB-' and higher), which is a much higher portionthan rated U.S. companies as a whole, of which only 48.2%% are investmentgrade.

The report is available to subscribers of RatingsDirect on the Global CreditPortal at

. If you are not a RatingsDirectsubscriber, you may purchase a copy of the report by calling (1) 212-438-7280or sending an e-mail to research_request@standardandpoors.com. Ratingsinformation can also be found on Standard & Poor's public Web site by usingthe Ratings search box located in the left column at

.(New York Ratings Team)

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