Emerging market stability propels potential rising stars, S&P says

By Jennifer Chiou

New York, June 20 - Nine of the 24 issuers that have crossed the speculative-grade threshold to investment grade in the year to date were recorded in the emerging markets, according to a report titled "Global Potential Rising Stars" from Standard and Poor's.

The total figure represents the addition of two issuers from the previous month's report, affecting debt worth $53.7 billion.

According to the agency, both the additions this month - Brazil-based Gerdau SA and U.S.-based Roper Industries Inc. - were part of its potential rising star list last month. The companies were upgraded due to their improved business profiles.

In the same period in 2006, 17 issuers had crossed into investment grade.

Among the 24, financials led the charge with seven issuers, the report stated.

"Rising stars have overtaken fallen angels by a margin of nine in 2007 to date," Diane Vazza, head of S&P's global fixed-income research group, said in an agency news release.

"This is in contrast with the 2006 pattern, but in line with the trend in 2004 and 2005."

As of June 14, 30 globally rated issuers were best placed to acquire rising-star status, seven more than the number reported in May and six more than the number one year ago, S&P noted.

Together, these 30 issuers have $143.2 billion of rated debt, of which $95.6 billion was attributable to sovereigns, the report said.

Based on rated debt volume, U.S.-based Williams Cos. Inc., a natural gas producer and pipeline company and a member of the S&P 500, is the largest corporate issuer poised to ascend to investment grade, with $10.9 billion in rated debt.

"Globally, sectors displaying the highest number of potential rising stars included utilities with four entities and insurance, consumer products, and banks with three entities each," Vazza added in the release.

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