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Fallen angels hit record high on downgrades of GM, Ford, S&P says
New York, May 5 - The downgrades to General Motors Corp. and Ford Motor Co. pushed the dollar value of fallen angels to a record annual high - even though 2005 has only just started the fifth month, Standard & Poor's said.
The previous record was set in 2002 when just over $200 billion of bonds were downgraded to junk from investment grade.
General Motors accounts for $291.8 billion of debt, now cut to BB from BBB-, and Ford is a further $161.3 billion, now cut to BB+ from BBB-.
Both issuers are more than five times as big as the previous largest fallen angel, WorldCom Inc., which had $30.0 billion of bonds downgraded to junk on May 10, 2002. The previous number two on the list was El Paso Corp. with $21.2 billion of bonds, cut to junk on Dec. 2, 2002, followed by Chrysler Corp. with $20.6 billion on Feb. 7, 1991, AT&T Corp. with $17.0 billion on Aug. 3, 2004, and Vivendi Universal SA, with $16.6 billion on Aug. 14, 2002.
The total for 2005 so far is now $481.7 billion.
However the count of fallen angels is just 15 for the year so far, the second lowest level since 1998, beaten only by last year's 11 for the comparable period, S&P said.
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