Bond ratings: locking up a horse-free barn
Now, long after their honest counsel could have been of great value, ratings service Fitch Ratings has begun to mark down values in earnest.
Fitch Ratings-New York-19 November 2008: The credit crisis and softening economy pushed up the par value of U.S. corporate bonds affected by downgrades to $296.7 billion in the third quarter, a level topping the worst quarters of the 2001 / 2002 downturn. Overall, downgrades affected 7.8% of U.S. bond market volume while upgrades affected 1.7%. At the investment grade level, the effects of negative and positive rating changes were 8.5% and 1.7%, respectively, of high grade volume while downgrades and upgrades affected 4.4% and 1.7%, respectively, of speculative grade volume.
The bulk of third-quarter downgrades occurred in the financial sector, which accounted for $258.5 billion, or 87%, of the total downgrades. Industrial downgrades, at $38.2 billion, were split $12.6 billion investment grade / $25.6 billion speculative grade.
Don Mecoy
Business Writer
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