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S&P says record 700 companies at risk of downgrade


    NEW YORK (Reuters) - The number of companies at risk of being downgraded rose to a record 700 globally in February, seventy more than at the same time last year, Standard & Poor's said on Friday.

    "There has been a continuous increase in the count of entities at risk of downgrades since mid-2007," Diane Vazza, head of Standard & Poor's global fixed income research group, said in a statement.

    "Credit fundamentals have been deteriorating in response to impending fears of a recession (currently estimated at 70 percent), along with a material slowdown in housing and consumer-related activity," S&P said.

    Ratings downgrades indicate worsening credit quality and typically increase borrowing costs.

    In January, 687 companies were at risk of downgrade, the ratings agency said.

    The media and entertainment sector had the highest ratio of issuers at risk of downgrade, followed by the forest products and building materials, consumer products, retail/restaurants, and automotive sectors, S&P said.

    "Geographically, the U.S. continues to top the list of potential bond downgrades, in part, because of greater credit volatility and also because of a larger rated population," Vazza added.

    (Reporting by Karen Brettell; editing by Gary Crosse)