Liquidity rating upgrades outnumber downgrades in first 10 months, Moody's says

New York, Aug. 27 - Upgrades to speculative-grade liquidity ratings have outnumbered downgrades by 1.2 to 1 in the 10 months since the new rating measure was introduced, according to Moody's Investors Service.

Moody's attributed the trend "more to better capital market receptivity in recent months than to meaningful improvement in issuers' profits and cash flows," according to analyst Charles Tan.

Moody's also noted that the speculative-grade liquidity ratings have proved more volatile than regular bond ratings and often move independently.

A total of 96 companies now have speculative-grade liquidity ratings, about 30% of the total rated high-yield debt and up from the initial 50 issued in late 2002, Moody's said. It is aiming to increase the total to nearly 50% of outstanding rating high-yield bonds and leveraged loans.

At the end of July, 39% of issuers had SGL-2 ratings and 34% had SGL-3 ratings. The scale ranges from SGL-1 to SGL-4.

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