S&P's fallen angels post second-highest full-year total in 2009 at 75

By Angela McDaniels

Tacoma, Wash., Jan. 15 - Standard & Poor's said the number of global fallen angels increased by one issuer since its previous report to a total of 75 for 2009. Fallen angels are issuers downgraded to speculative grade (BB+ and lower) from investment grade (BBB and higher).

The fallen angels for 2009 have rated debt worth $240.1 billion, according to an S&P news release.

"This past year was the second-most active for fallen angel activity, both by issuer tally and debt volume, since our series began in 1987," Diane Vazza, head of S&P's global fixed-income research group, said in the release.

"By issuer count, 2009 trails the record-high 84 fallen angels recorded in 2002. By debt volume, 2009 comes in second to the $520.1 billion, or €358.5 billion, in full-year 2005.

"The record number of fallen angels in 2002 was largely a result of the previous recession, while 2005's record-high fallen angel debt volume stemmed largely from the downgrades of General Motors [Corp.] and Ford [Motor Co.]."

The agency said its tally of global potential fallen angels increased by two this past month to 72 issuers with $200.46 billion in rated debt. These companies are rated BBB- and have either a negative outlook or ratings on CreditWatch with negative implications.

By count, finance companies led 2009's fallen angels with 12 entities, followed by banks with 11 entities and utilities with nine.

Sectors poised to lead fallen angel incidence are banks with 16 entities, consumer products with nine and metals, mining and steel with six, according to the release.

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