Amount of junk bonds under distress eases, S&P says

Discussion in 'Wall St. News' started by ASusilovic, Jun 26, 2009.

  1. NEW YORK (MarketWatch) -- Signaling some improvement in credit markets, the amount of speculative-grade bonds carrying yields deemed extremely high compared to Treasurys has declined to the lowest seen during 2009, Standard & Poor's said Friday.

    The rating agency's metric for measuring junk bonds under distress has retreated to the "lowest point in nine months, with few signs of a slowing of the current decline," S&P analysts said in a report. Standard & Poor's considers companies rated BB or lower to be non-investment grade.

    S&P classifies debt as distressed if it is trading at yields more than 1,000 basis points -- 10 full percentage points -- more than Treasurys. The percentage of speculative-rated debt topping that level dropped to about 34% as of June 15, down from an "astronomical high" of 85% in December 2008, S&P said.

    That's still relatively elevated as lending conditions remain harsh for lower-rated companies. The long-term average is 15.7%.
  2. ....the cancer is in remission. :cool: