Fallen Angels Surpass Rising Stars By 17% In 2007, Says Report
Before the recent shift, merger and acquisition (M&A) activity played a dominant role in the crossover of companies to speculative grade from investment grade in 2007, with 44% of movements to the speculative-grade domain citing M&A activity, according to an article published today by Standard & Poor’s.
The report, titled “Crossover Credits Wrap Up: 2007 (Premium),” says that in 2008, however, to expect a downturn in M&A activity across the credit spectrum because of higher volatility and a more expensive financing environment for all but the most creditworthy buyers.
“Globally, fallen angels outpaced rising stars in 2007, with 42 fallen angels versus 36 rising stars,” said Diane Vazza, head of Standard & Poor’s Global Fixed Income Research Group. “Growing financial market disruptions in the latter half of the year favored downward movements in credit quality. This is in sharp contrast with the beginning of 2007, when rising stars surpassed fallen angels. The trend in crossovers mirrored that of the larger ratings universe, which also had stronger movements downward in the latter half of the year.” Media Contact:
Mimi Barker, New York (1) 212-438-5054, mimi_barker@standardandpoors.com Americas Customer Service: (1) 212-438-7280
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