EMPIRICAL EVIDENCE
Trends in distribution across industries follow broad structural shifts in the economy: The industries with highest growth in rated companies were Telecom, Media, Healthcare, and Technology. The number of rated Telecom credits jumped over 500 percent over the decade. The slowest growing pools of rated credits were Utilities, Capital Goods, and Transport. Materials and Consumer were the two largest industry groups in 1993 and had the largest number of additions over the 10 years.
Much of the growth in the pool of rated credits was among speculative credits, the final frontier of credit. Of the 794 credits in 1993, 62 percent were investment grade; by 2003, they had been diluted down to 43 percent of the total 2,246 credits. This represents a growth of the speculative grade, not a trend of increased leverage, of the 656 continuously rated credits. Leverage and ratings have been relatively stable otherwise.
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