TEXT-S&P: downgrades outnumber upgrades in Q3

(The following statement was released by the rating agency)

Oct 9 - Standard & Poor's Ratings Services downgraded 156 issuers and upgraded 65 globally in the third quarter of 2012, according to a Global Fixed Income Research report published today titled "Global Downgrades Dwarf Upgrades In The Third Quarter--And Europe Takes Center Stage."

The downgraded issuers had a total of $456.2 (EUR351.6) billion in rated debt, and the upgraded entities accounted for $411.1 (EUR316.9) billion in rated debt. By issuer count, downgrades, which clocked in at 71% of total rating actions last quarter, hit the highest level since the third quarter of 2009. This was not due to a surge of downgrades, as seen in the recent past, but more because of the lack of upgrade activity, especially in the U.S. and Europe, which failed to help balance the scale.

"In Europe downgrades outpaced upgrades at a ratio of five to one in the third quarter and its outlook, as measured by negative bias, remains 32% worse than its historical average since 1995, despite eight consecutive quarters of heavy downgrade activity," said Diane Vazza, Managing Director for Standard & Poor's Global Fixed Income Research.

While we expect global credit conditions to remain reasonably stable--though not positive--in the near term, Europe remains a concern as economic and credit conditions there do not currently support a turnaround. (For more information, see "The Eurozone's New Recession--Confirmed," published Sept. 25, 2012.)

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)

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