Credit Trends:

European Ratings Distribution As Of Second Quarter 2013

Global Fixed Income Research: Diane Vazza, Managing Director, New York (1) 212-438-2760; diane.vazza@standardandpoors.com Gregg Moskowitz, Associate Director, New York (1) 212-438-1838; gregg.moskowitz@standardandpoors.com

Table Of Contents
Definitions Of Regions

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Credit Trends:

European Ratings Distribution As Of Second Quarter 2013

The Global Fixed Income Research team publishes a regional corporate issuer ratings distribution report every month, which analyzes data from the most recent quarter. This month we are highlighting Europe, which has seen its number of rated issuers rise to 1,289 as of June 30 from 1,262 in the previous quarter. The following are additional highlights from the second quarter: The 1,289 issuers are comprised of 849 investment- and 440 speculative-grade entities. The proportion of European speculative-grade issuers rose to 34.1% as of June 30 from 32.7% in the first quarter. The median rating of European entities declined to 'BBB' from 'BBB+' in the first quarter. The proportion of issuers rated in the 'A' category ('A+', 'A', 'A-') declined to 29.5% as of June 30 from 30.2% in the previous quarter. The proportion of issuers in the 'B' category ('B+', 'B', 'B-') increased to 18.7% from 17.5%. The majority of European issuers (57.9%) are nonfinancial entities. Financial issuers make up 55.5% of the investment-grade companies in the region. Nonfinancial issuers comprise 83.6% of the region's speculative-grade entities. As of the second quarter, the share of entities rated 'CCC' and below increased to 2.4%. By country, the greatest number of rated European entities are in the U.K. (23%), followed by France with 13% and Germany with 11%. Standard & Poor's assigned 43 new ratings to European entities in the second quarter. The downgrade to upgrade ratio is 1.28%. The financial institutions sector has the most issuers (329), followed by insurance. Europe accounts for 20% of all global corporate rated entities.

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Credit Trends: European Ratings Distribution As Of Second Quarter 2013

Chart 1

Table 1

European Issuer Ratings Distribution By Sector*

Sector All financials Financial institutions Insurance All nonfinancials Auto/capital goods/aero/metals Consumer and service Energy/natural resources Forestry, homebuilders Health care/chemicals High technology/office equipment Media and entertainment Real estate Telecommunications Transportation AAA 6 6 0 1 0 0 0 0 0 0 0 0 0 0 AA 79 47 32 24 3 2 5 0 5 0 0 0 0 6 A 257 128 129 123 19 12 11 2 17 3 1 2 6 6 BBB 129 84 45 230 38 31 7 9 17 3 22 13 16 16 BB 47 42 5 121 29 13 10 17 14 5 9 5 10 3 B 20 18 2 221 31 37 16 11 34 11 35 1 30 11 CCC and lower 5 4 1 26 7 3 2 3 1 1 5 1 0 2

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Credit Trends: European Ratings Distribution As Of Second Quarter 2013

Table 1

European Issuer Ratings Distribution By Sector* (cont.)

Utility 1 3 44 58 6 4 1 *Data as of June 30, 2013. Includes parent and subsidiary level issuers. Source: Standard & Poor's Global Fixed Income Research, Standard & Poor's CreditPro.

Chart 2

Table 2

Summary Of Global Corporate Ratings Changes During Second Quarter 2013

Europe New ratings (count) Upgrades (%) Downgrades (%) Withdrawn ratings (%) Downgrade to upgrade ratio (%) 43 2.65 3.38 1.43 1.28 U.S. 115 3.73 2.70 1.81 0.72 Other developed 22 2.19 3.60 1.39 1.64 Emerging markets 71 4.60 2.82 2.25 0.61 Global 251 3.56 2.98 1.79 0.84

Data as of June 30, 2013. Includes parent and subsidiary level issuers. Source: Standard & Poor's Global Fixed Income Research, Standard & Poor's CreditPro.

Table 3

Issuer Ratings Distribution By Region*

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Credit Trends: European Ratings Distribution As Of Second Quarter 2013

Table 3

Issuer Ratings Distribution By Region* (cont.)

Rating (% of total issuers) AAA AA A BBB BB B CCC and lower Total (count) Median rating Speculative grade (%) Europe 0.5 8.0 29.5 27.9 13.0 18.7 2.4 1289 BBB 34.1 U.S. 0.1 4.5 17.2 24.4 16.3 34.8 2.6 3148 BB+ 53.7 Other developed 0.5 8.3 33.2 31.0 11.4 13.1 2.6 665 BBB+ 27.1 Emerging markets 0.5 1.9 12.4 29.3 28.4 25.3 2.3 1417 BB+ 56.0 Global 0.3 5.1 20.2 26.9 17.8 27.3 2.5 6493 BBB47.5

*Data as of June 30, 2013. Note that the sum of the regions does not equate to the global total because some countries are components of multiple regions (for example, Latvia and Estonia are part of the European count as well as the emerging markets count). Includes parent and subsidiary level issuers. Sources: Standard & Poor's Global Fixed Income Research and Standard & Poor's CreditPro.

Definitions Of Regions
For these regional quarterly distribution studies we've divided global ratings into four regions: the U.S., Europe, other developed, and emerging markets. Note that the sum of the regions does not equal the global total because we have included some countries in multiple regions. (For example, Latvia and Estonia are part of the European count as well as the emerging markets total.)

U.S.:
The U.S., Bermuda, and the Cayman Islands.

Europe:
The U.K., Germany, France, the Netherlands, Sweden, Switzerland, Spain, Luxembourg, Ireland, Austria, Belgium, Norway, Denmark, Portugal, Greece, Poland, Finland, Italy, Czech Republic, Hungary, Bulgaria, Cyprus, Iceland, Slovakia, Lithuania, Malta, Slovenia, Latvia, Channel Islands, and Estonia.

Other developed:
Japan, Australia, New Zealand, and Canada.

Emerging markets:
Argentina, Azerbaijan, Bahamas, Bahrain, Barbados, Belarus, Belize, Bolivia, Bosnia-Herzegovina, Brazil, British Virgin Islands, Cambodia, Chile, China, Colombia, Costa Rica, Croatia, Cyprus, Czech Republic, Dominican Republic, Egypt, El Salvador, Estonia, Fiji, Georgia, Guatemala, Hong Kong, Hungary, India, Indonesia, Israel, Jamaica, Jordan, Kazakhstan, Korea, Kuwait, Latvia, Lebanon, Liberia, Lithuania, Macao Special Administrative Region of China, Malaysia, Marshall Islands, Mauritius, Mexico, Mongolia, Montenegro, Morocco, Netherlands Antilles, Nigeria, Oman, Pakistan, Panama, Papua New Guinea, Paraguay, Peru, Philippines, Poland, Qatar, Romania, Russian Federation, Saint Helena, Saudi Arabia, Singapore, Slovakia, Slovenia, South Africa, Sri Lanka, Syrian Arab Republic, Taiwan, Thailand, Togo, Trinidad and Tobago, Tunisia, Turkey, Ukraine, United Arab Emirates, Uruguay, Uzbekistan, Vanuatu,

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Credit Trends: European Ratings Distribution As Of Second Quarter 2013

Venezuela, and Vietnam.

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