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 weakened slightly in third-quarter 2012, as downgrades outnumbered upgrades by more than two to one, said an article published today by Standard & Poor's Global Fixed Income Research, titled "S&P 500 Credit Profile: Rising Stars Shine Despite Increasing Downgrade Activity In Third-Quarter 2012."

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

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

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

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

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

. (New York Ratings Team)

((e-mail: pam.niimi@thomsonreuters.com; Reuters Messaging: pam.niimi.reuters.com@reuters.net; Tel:1-646-223-6330;))