(The following statement was released by the rating agency)
Oct 8 - Demand for speculative-grade assets is still brisk, according to a Standard & Poor's Global Fixed Income Research report published today titled "Yield Seekers Flock To Speculative-Grade Assets."
"Several technical measures, such as the current yields, spreads, and issuance levels, indicate that the speculative-grade bond market remains resilient as investors seek more sources of yield," said Standard & Poor's Global Fixed Income Research Managing Director Diane Vazza.
Speculative-grade bond yields are at the lowest levels we have recorded since we started tracking our speculative-grade composite bond spread and yields in 2003. Our composite average speculative-grade bond yield was 6.62% as of Sept. 19, 2012--well below the historical average of 8.83% since the beginning of 2004. Investor demand is supporting issuance levels that are on track to surpass issuance levels of the past several years. For the nine months ended Sept. 30, 2012, speculative-grade companies in the U.S. issued $196.8 billion in bonds--higher than the $153.8 billion issued during the same period last year.
Speculative-grade issuance has decreased to $7.1 billion from $8.6 billion over the past week as spreads have widened by eight basis points (bps) to 617 bps. The speculative-grade spread is tighter than its one-year moving average of 674 bps and its five-year moving average of 752 bps. Investment-grade issuance has increased to $11.5 billion from $11.1 billion over the past week as spreads tightened by 7 bps to 191 bps. The investment-grade spread is tighter than its one-year moving average of 211 bps and its five-year moving average of 246 bps.
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. (New York Ratings Team)