| Abstract: | The high-yield market has staged a strong rally, tightening 140 basis points (bps) from the 2008 high of 803 bps. Indeed, marketwide conditions improved since March, with investment-grade spreads 35 bps tighter than the 2008 high and the Ted Spread (three-month LIBOR to the three-month Treasury bill) down to 98 bps from 157 bps at the end of March. Despite the recent market improvement, we maintain the same fundamental outlook as we did at the beginning of the year. We continue to expect deterioration in credit quality for the high-yield segment. Downgrade risks are elevated, and the pace of downgrades has accelerated in 2008. Firms will continue to face earnings pressure throughout 2009, as the economy is expected to grow
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| Sector: | Asset-Backed Commercial Paper, Asset-Backed Securities, Collateralized Debt Obligations, Commercial MBS, Corporations, Financial Institutions, Global Issuers, Insurance, International Public Finance, Public Finance, Real Estate Companies, Residential MBS, Servicer Evaluations, Sovereigns, Structured Finance, Utilities
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