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S&P: Distressed Ratio Falls to 34%

By Matthew Sheahan, Leveraged Finance News
June 29, 2009
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The distressed debt ratio is at its lowest point in nine months, dropping to 34% from a high of 85% last December, according to a study released today by Standard & Poor’s.

The amount of affected distressed debt dropped to $177 billion from $232.8 billion in May, according to S&P. The total number of companies with bonds trading at spreads of 1,000 bps ore more is now 268. At the end of May there were 338 such companies.

The speculative-grade corporate bond spread reached 946 bps on June 15, down from 1,136 bps May 15.

The distressed levels in leveraged loans have decreased also. The S&P/LSTA Leveraged Loan Index distressed ratio fell to 47.5% in May from 54.8% in April.