Rising stars' dollar value hits new high, S&P says

New York, Nov. 12 - The dollar value of debt raised to investment grade from junk has a hit a new record, Standard & Poor's said Friday.

So far this year there have been $54.2 billion of rising stars, beating the previous full-year record.

The number of rising stars, at 39, however, is below the record of 55 in 1997.

For the second time since 1998, the count of rising stars is running ahead of the number of fallen angels - the companies moving in the other direction. Downgrades to junk total 23 for 2004 through Nov. 3.

S&P said that the rising stars are part of an overall picture of improving credit quality that has been "a central theme" of 2004.

"Although the tide in interest rates has turned in key regions, it does not yet herald a critical change in the near-term bond market outlook," said Diane Vazza, head of S&P's global fixed-income research group, in a news release.

"A steady slide in global default rates and strengthening economic fundamentals have helped sustain investors' appetite for risk in an environment that is awash with liquidity. Although the balance of risks associated with the bond market outlook has more of a potential downside now than in the last two to three years, the uneven pace of economic recovery globally leaves room for extended gains."

As of Nov. 11, 30 issuers were identified by S&P as potential rising stars, up two from the previous report two months earlier. Issuers qualify for this listing by being rated BB+ and having either a positive outlook or a CreditWatch positive designation.

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