S&P Downgrades 15 More Co.’s to Junk in June

U.S. corporate defaults are causing the number of companies that lost their investment-grade credit ratings to rise at the third-highest total since at least 1987. Ratings on 15 companies worldwide were cut to junk status in June, Standard & Poor’s said on Monday.

From Reuters:

Companies cut to junk status, so-called fallen angels, are relatively rare but have surged amid the global recession.

Year to date, 60 issuers have been cut to junk status, affecting $209 billion of debt, S&P said in a statement.

Another 75 issuers with $255 billion in rated debt are teetering on junk status, the rating agency said.

Nineteen banks and finance companies have been cut to junk status this year, more than any other industry….Another 17 are vulnerable to a downgrade to junk, S&P said.

S&P expects more companies to go into junk land. That fact will unavoidably cause a  surge in borrowing costs as investors will demand higher yields.

emphasis added

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