S&P: Rising star potential remains limited

By Jennifer Chiou

New York, Sept. 2 - Standard & Poor's said in a report that two more issuers are globally positioned to migrate up the credit spectrum this month, while the number of issuers about to cross over in the opposite direction is currently elevated at 43 issuers.

The report said that two issuers that S&P has added to the potential rising star count bring the tally to 14 issuers, up from the 45-month low of 12 issuers this past month.

Currently, rising stars outnumber fallen angels by a margin of seven, S&P said.

"This shows a pattern different from what was experienced during calendar year 2007, when 36 rising stars and 42 fallen angels were recorded globally," Diane Vazza, head of S&P's global fixed-income research group, noted in a written statement.

"Given the volatility in the credit markets coupled with overall downward pressure, especially noted by the sharp decline in potential rising stars from 32 at the beginning of the year, we expect this pattern to reverse as the year continues."

Of the 14 potential rising stars this month, 13 have a positive outlook and the remaining one has ratings on CreditWatch with positive implications, S&P added, noting that 11 of these issuers belong to the broadly defined industrial sector and three are from the telecommunications sector.

Global potential rising stars are defined as issuers that are currently rated BB+ with either a positive outlook or with ratings on CreditWatch with positive implications.

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