S&P finds potential fallen angels up slightly in February

By Angela McDaniels

Seattle, Feb. 9 - Standard & Poor's said the number of entities at risk of dropping into fallen-angel territory increased in January.

"As of Feb. 7, there were 46 entities globally at risk of becoming fallen angels, with rated debt totaling $68.81 billion," Diane Vazza, head of S&P's global fixed-income research group, said in an agency news release.

"This is six greater than the 40 reported a month ago, but four fewer than the number reported in December 2004."

The agency found that the four sectors most vulnerable to generating fallen angels are media and entertainment, retail and restaurants, capital goods and high technology.

Additionally, of the 46 potential fallen angels, 21 are members of major S&P equity-based indexes.

For the year through Feb. 7, only two fallen angels were recorded, with rated debt worth $5.1 billion.

In 2005, S&P recorded 41 fallen angels with rated debt worth $520.6 billion. Fallen angels trailed rising stars for the year by 19 entities - the highest margin since 1997.

Fallen angels make up only 2.19% of the total count of investment-grade entities each year on average from 1981 to 2004, the agency said.

S&P detailed the fallen angel information in its latest "Global Fallen Angel Report."

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