Article: In Hindsight.(In Hindsight)

Byline: Editorial Staff

A HIGH-YIELD HIATUS?

The high-yield rally that the credit markets have seen could take a summer break, according to a report issued Monday by Standard & Poor's. The report cited increasing default rates and a negative near-term economic outlook as reasons for the potential slowdown in recovery.

Spreads on the S&P speculative-grade composite had fallen by 783 basis points to 971 basis points by July 1 from 1,647 at the end of 2008. For the month of June, speculative-grade spreads tightened 88 basis points on the S&P composite. The average spread to maturity for BB and B-rated loans dropped to 945 basis points on June 19 ...

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