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Moody's says current speculative-grade debt issuance levels likely to continue through second quarter
By Jennifer Lanning Drey
Portland, Ore., April 23 - Moody's Corp. expects the weak first-quarter issuance levels among speculative-grade bond and bank debt issuers to continue through the second quarter and then show moderate improvement later in the year, Raymond McDaniel, Moody's chief executive officer, said Wednesday during the company's first-quarter earnings conference call.
"We have seen modest improvement of debt issuance in some sectors that are under stress, but overall activity remains constrained and confidence-sensitive," McDaniel said.
Moody's is projecting that its full-year revenues in U.S. corporate finance will drop by an amount in the mid- to high-20% range, as compared to 2007. The primary driver of the decrease is declines in revenue from rating speculative-grade bond and bank debt.
"We remain cautious about the likely pace and strength of recovery in credit markets in 2008," McDaniel said.
For the first quarter, Moody's U.S. corporate finance revenue decreased 41% from the prior-year first quarter as growth in revenues from rating investment-grade debt was more than offset by declines in revenue from rating speculative-grade debt.
Outside the United States, corporate finance revenue was down 6% due to declines in revenue from rating European speculative-grade securities.
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