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High yield credit trend improves, Moody's says
By Reshmi Basu
New York, March 9 - The trend of rating revisions to U.S. high-yield companies has improved so far this quarter, with 35 upgrades to $14.9 billion of bonds and preferred stock compared to 48 downgrades to $46.5 billion, according to a Moody's Investor Services news release.
The upgrade ratio for the quarter so far is 42% compared with 40% for the same quarter last year and 35% for all of 2003.
For the quarter to date, the 10 largest par value downgrades made up 80% of the par value amount of high-yield downgrades. The companies included Delta Air Lines, Tenet Healthcare, Owens-Brockway Glass Container, Tampa Electric, Dex Media, Dobson Communications, Goodyear, Trump Atlantic City, Bowater and CenterPoint Energy, according to John Lonski, the author of the release.
So far for this quarter, the per diem count of high-yield downgrades trails 2003 by 4%. During 2003 the daily count plunged 22%.
However, the par value of U.S. high yield company downgrades has increased by 12% on a per diem basis this quarter. Last year the par value count dropped by 42%.
After surging 71% in 2003, this quarter so far has seen per diem count of high-yield upgrades surpass the 2003 rate by 29%. But following 2003's 199% advance, this quarter's par value of high-yield upgrades per diem lagged behind 2003's rate by negative 12%.
For this quarter to date, the 10 largest high-yield upgrades made up 76% of the $15.3 billion of the par value of high-yield upgrades. The companies included Rite Aid, YUM Brands, Illinois Power, Sovereign Bancorp, Station Casinos, Saks, Hasbro, XTO Energy, GrafTech International and Alamosa.
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