S&P 500 Credit Profile: After Briefly Reaching A New High, Credit Looks Strong For The Index

The S&P 500 hit a new record this week when it briefly climbed above 1,900 on Tuesday, and the credit profiles of its rated constituents remain stable. The credit measures of the index’s constituents are stronger than those of U.S. companies in general. In contrast to U.S. corporate ratings overall, the majority (387) of the companies in the index are rated investment grade (‘BBB-‘ and higher). Through the first four months of 2014, more than twice as many companies in the index were upgraded than were downgraded, even as downgrades have outnumbered upgrades for U.S. companies overall. However, the U.S. lost one of its four ‘AAA’-rated companies in April after Automatic Data Processing Inc. (ADP) was downgraded to ‘AA’ from ‘AAA’. Despite the Federal Reserve’s moves to taper its bond purchases, bond yields have remained low and companies have actively issued debt, though at a slightly slower rate than last year. While the index constituents’ total debt has risen, the increase in leverage has been partially offset by rising cash and earnings and rating outlooks remain stable. More than 80% of the index’s rated constituents have a stable rating outlook, and the rating outlooks for the remaining companies are nearly equally split between potential upgrades and potential downgrades.

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The Association of International Wealth Management of India (AIWMI) is a not-for-profit organization and a globally recognized membership association for finance professionals. AIWMI primarily focuses on the broad and strategic role of developing a more robust and forward-looking training infrastructure for the financial services sector and to promote more active industry involvement and collaboration in training and continuing education. AIWMI is offering advanced international certification programs along with a wide variety of high-quality executive education programs. AIWMI programs combine state-of-the-art knowledge and skills with practical experience and insights into the functioning of the financial sector. All AIWMI courses and educational events have an intense and pragmatic curriculum. Participants are exposed to the latest developments within the financial services sector. AIWMI plays a key role in guiding the development of the financial services sector. AIWMI works with key industry participants’ viz. the Government, the Regulators, the Industries/Associations, the Corporate, the Media and the General Public to achieve its objectives. Besides enhancing technical competence and professionalism in the industry, AIWMI organizes events and facilitates discussions to promote best practices in leadership and talent development in the financial sector with an aim to become Asia’s premier center of excellence for financial education.

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