High yield downgrades worsen to 4.5 times upgrades in second quarter so far, Moody's says

New York, May 13 - The pace of credit quality deterioration in high-yield companies has quickened in the second quarter from the first quarter, according to new figures from Moody's Investors Service - although the rating agency added that the weak performance of the high tech and telecommunications sectors has skewed the numbers.

For the second quarter through May 10, there were 54 downgrades to high-yield companies compared to 12 upgrades.

The downgrade-to-upgrade ratio worsened to 4.5:1 from 3.8:1 for the first quarter as a whole. Excluding high tech and telecom, the figures are still worse but by a smaller amount, increasing to 3.8:1 from 3.6:1 for the first quarter.

Of the 54 downgrades so far in the second quarter, 12 were to high-yield companies having "significant exposure to either high technology or telecommunications," Moody's said. These sectors accounted for only one of the 12 upgrades.

While the figures are worse than the first quarter, Moody's noted that the bottom of the current credit cycle is still the fourth quarter of 2001 when the downgrade-to-upgrade ratio peaked at 4.9:1.

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