Credit quality slide continues to slow for U.S. non-financial issuers, S&P says

New York, July 17 - The pace of credit deterioration for U.S. non-financial issuers continued to slow in the second quarter, Standard & Poor's said Thursday.

During the three months, downgrades made up 75% of all rating actions compared to 80% in the first quarter, S&P said. The low point was in the fourth quarter of 2001 when the measure reached 90%.

"With percentage change in GDP forecasted at over a 4% increase for the second half of 2003 and 2004, the incidence of downgrades will continue to decelerate, although the percentage will remain well above the decade's average of 64%," said Diane Vazza, head of Standard & Poor's global fixed income research group, in a news release.

S&P added that outlook changes support expectations of a slowing in downgrade.

At June 30, 29% of issuers had a negative outlook or were on CreditWatch negative compared to 31% at the end of March and 32% a year earlier.

The proportion of stable outlooks inched up to 63% from 62% at both the end of March and a year earlier. Positive outlooks were at 6% versus 5% a year earlier.

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