In the report, titled "2011 Credit Themes For U.S. Nonfinancial Companies," Standard & Poor's looks ahead to issues that could affect nonfinancial corporate credit quality in the coming year.
"As we look forward, we believe that incremental credit improvement will become more difficult because many companies have already benefited, in terms of ratings and bond spread compression, from drastic cost-cutting measures and the rebound in financial markets," said Diane Vazza, head of Standard & Poor's Global Fixed Income Research.
Though another round of contagion stemming from problems in Europe's periphery, or a less-likely source such as U.S. public finance, could cause a disruption in financial markets, Standard & Poor's anticipates continued health in the U.S. high-yield bond and syndicated loan primary markets. If liquidity for upcoming maturities remains plentiful, credit trends will depend primarily on operating performance and idiosyncratic events, such as M&A. "We expect only modest revenue growth overall and that margins will be flat to slightly down," said Ms. Vazza. "To this end, we would expect upgrades to slow in 2011 but downgrades to remain muted."
The report is available to RatingsDirect subscribers on the Global Credit Portal at www.globalcreditportal.com and RatingsDirect subscribers at www.ratingsdirect.com. 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 [email protected]. 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 www.standardandpoors.com. Members of the media may request a copy of this report by contacting the media representative provided.
Media Contact:
Mimi Barker, New York (1) 212-438-5054, [email protected]
Analyst Contact:
Diane Vazza, New York (1) 212-438-2760