... in May once again exceeded upgrades by a wide margin, suggesting April s even split was a blip in the yearlong negative trend. Weaker cash flow amid the consumer-spending slowdown and higher prices for crude oil and other commodities is continuing to pressure the intrinsic liquidity of some speculative-grade issuers. Weaker cash flow is also having knock-on liquidity effects for some issuers contributing to the increased use of revolving credit lines and diminished headroom under financial covenants. Driven by these liquidity pressures, SGL downgrades in May topped upgrades by ## to #, seemingly confirming that April s balance between upgrades and downgrades (# to #) was not the beginni ng of a turnaround for speculative-grade issuers, which for the most part have seen liquidity deteriorate since the onset of the credit crisis last summer. The list of SGL downgrades for the mont h of May included Continental Airlines...

Report Type: SGL Monitor
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 Moody's Global Credit Research
Moody's Investors Service, a leading global credit rating, research and risk analysis firm, publishes credit opinions, research, and ratings on fixed-income securities, issuers of securities and other credit obligations. Credit ratings and research help investors analyze the credit risks associated with fixed-income securities. Ratings also create efficiencies in fixed-income markets and similar obligations, such as insurance and derivatives, by providing reliable, credible, and independent assessments of credit risk. For issuers, Moody's services increase market liquidity and may reduce transaction costs.