Diane Vazza
Diane Vazza
across building consumer credit domain energy entities expected grades growing higher hurricane labor market media momentum potential pressures risk
Not surprisingly, many of the entities at risk of potential downgrades were in the consumer discretionary domain (automotive, media and entertainment, consumer products, and retail/restaurants), where pressures have been building (owing to hurricane activity, higher energy prices, and growing uncertainty about labor market conditions) and momentum is expected to decelerate, Downgrade Potential Across Credit Grades And Sectors.
angels biggest exceeded fallen gap margin number rising since stars though
Rising stars still outpace fallen angels globally, though the gap is narrower than in 2005, when the number of rising stars exceeded that of fallen angels by the biggest margin since 1997.
asset assets investors looking mutual portion
Many investors have become a lot more sophisticated with their asset allocations. They're not just looking at fixed-income alone. They're looking to put a portion of their assets in high-yield mutual funds.
although balance bond credit likely performance sheets stage strong suffer
Although balance sheets look strong at this stage of the credit cycle, bond performance is likely to suffer ahead.
asset below cautionary class growth high position projected year yield
U.S. High Yield Monthly: Cautionary Flags. However, the below 3.0% growth projected for the second-half of the year and into 2007 has historically not favored the high yield market, and a cautionary position on this asset class remains.
activity borrowing capital corporate credit economy expected external fairly growth margins numbers orders outlook raise slack strong subdued until
U.S. Corporate Profits: Outlook And Credit Implications. Up until now, this has been subdued by strong corporate liquidity positions, but with manufacturing activity expected to rev up (as hinted by the fairly strong ISM manufacturing numbers and orders growth) and margins of slack in the economy set to diminish, strong growth in capital expenditures will be needed. In turn, this should raise external borrowing needs.
debt distressed highest propensity rated share total
U.S. Distressed Debt Monthly Monitor. In the U.S., the automotive, telecommunications, and retail/restaurant sectors showed the highest propensity for distress as a share of total speculative-grade rated issues.