Fitch: Unclear Economic Outlook Clouds U.S. HY Market.CHICAGO -- The U.S. High Yield Market experienced a strong third-quarter in 2006 (Q3 2006) as investors enjoyed solid returns but mixed economic signals and other market conditions pose some risks, according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. Fitch Ratings Fitch Ratings An international rating agency for financial institutions, insurance companies, and corporate, sovereign, and municipal debt. Fitch Ratings has headquarters in New York and London and is wholly owned by FIMALAC of Paris. . Energy prices have come down and recessionary concerns have lessened, with the deteriorating housing market being somewhat offset by consumers' willingness to spend in other areas. Consequently, for the first time in years, there is genuine disagreement over whether the Fed's next interest rate move will be upward or downward. At the same time the economy is slowing, several other negative factors are at play. These include a rise in debt maturities, continuing deterioration de·te·ri·o·ra·tion n. The process or condition of becoming worse. in the quality of new issuance, weakening covenant packages and a slowdown in the improvement of corporate financial metrics metrics Managed care A popular term for standards by which the quality of a product, service, or outcome of a particular form of Pt management is evaluated. See TQM. . Total upgrades exceeded downgrades in Q3, a significant reverse from Q2. Upgrades were not concentrated in any particular industry sector. One stand out was Xerox Corp, whose Issuer Default Rating (IDR IDR In currencies, this is the abbreviation for the Indonesian Rupiah. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. ) was upgraded to 'BBB-' from 'BB+' on Aug. 6. High yield issuance slowed significantly in Q3, although the forward calendar remains large and a number of big deals are expected to price during Q4. "It will be interesting to watch whether the new supply materializes as anticipated, and whether it is enough to lead to a buyers' market," said Robert Horton For the American actor and star of the TV series Wagon Train, see . Sir Robert Horton (born 18 August 1939) is a UK businessman. He is the eldest of three brothers, David Horton and Mark Horton. , Senior Director, Fitch High Yield Corporate Finance. "If the economy continues to cool without slowing too much, high yield market could continue to provide investors with decent returns, albeit more though coupon return than through price appreciation." Fitch Ratings continues to advance its high yield coverage. In Q3, Fitch initiated new IDRs on 13 issuers in the non-investment grade category. Fitch currently rates 80 of the largest 100 high yield issuers and nearly 40% of Fitch's total Corporate ratings are high yield. The full 'High Yield Quarterly Review' can be found on Fitch's web site at www.fitchratings.com under the 'Corporate Finance' then 'High Yield' tabs. Fitch's rating definitions and the terms of use Terms of Use are rules set up by the owner of an intellectual property or service to govern how they may be legally used. In many cases, terms of service are used as a contractual agreement between a company and users of a service they provide. of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures Policies and Procedures are a set of documents that describe an organization's policies for operation and the procedures necessary to fulfill the policies. They are often initiated because of some external requirement, such as environmental compliance or other governmental are also available from the 'Code of Conduct' section of this site. |
|
||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion