S&P adds two new fallen angels since last report, no new rising stars

By Angela McDaniels

Tacoma, Wash., Nov. 17 - Standard & Poor's said its number of global fallen angels in 2011 increased by two to 32 as of Nov. 8. The number of rising stars is unchanged at 29 as of Nov. 9.

This month is the first time this year that the number of rising stars has not increased, according to an agency news release.

A fallen angel is an issuer that has been downgraded to speculative grade from investment grade. A rising star is an issuer that has been upgraded to investment grade from speculative grade.

The 32 fallen angels accounted for $227.9 billion of rated debt, much higher than the 29 rising stars' $134.1 billion of rated debt.

The number of fallen angels so far this year is 50% higher than the total number last year, but the total count is still well below the numbers seen in 2007-2009, head of S&P global fixed income research Diane Vazza noted in the release.

Potential movers

The global tally of potential fallen angels was flat at 40, and the number of potential rising stars grew by six to 22.

"The increase in potential rising stars implies that the number of rising stars could climb through the rest of the year," Vazza said in the release.

A potential fallen angel is an issuer rated BBB- with either a negative outlook or ratings on CreditWatch with negative implications. A potential rising star is an issuer rated BB+ with either a positive outlook or ratings on CreditWatch with positive implications.

The potential fallen angels together have $377.2 billion of rated debt.

By region, Europe leads with 17 potential fallen angels so far this year.

By sector, banks lead the list of potential fallen angels with 10 issuers. Five of these banks are based in the Republic of Portugal, which is also on the list of potential fallen angels.

Sovereigns represent five of the potential fallen angels but have more than double the amount of banks' rated debt at $191.2 billion.

Portugal remains the largest potential fallen angel this month. It has $115.8 billion of rated debt.

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