A report out today by S&P Global Ratings said that issuers rated by the agency at B- or lower with negative outlooks or on CreditWatch with negative implications — "weakest links" — fell to 207 as of Dec. 31, 2021, the lowest level since April 2019 and off 57% from year-end 2020. Every geographic region recorded reductions in weakest link issuers, with the U.S. showing the greatest numerical decline, falling by 207 issuers, or 61%.

Canada showed the greatest percentage decline in weakest links, at 70%, a reduction of 14 issuers.

While every sector recorded fewer weakest link issuers, the largest declines were in media/entertainment and oil/gas, which fell by 48 and 32 issuers, respectively.

S&P Global Ratings attributed the declines in weakest links to a continuing earnings recovery and issuers' ability to tap into "accommodative financing conditions." Noting that the decline also reflected a decrease in lower-rated issues with a "negative bias" — defined as issuers with a negative outlook or on CreditWatch with negative implications — the report said that "the low level of negative bias implies a lower risk for defaults in the near term."

At year-end 2021, the Asia-Pacific region had the highest percentage of speculative-grade issuers with negative bias, at 24.4%, according to the Ratings report. Canadian issuers had the lowest percentage of issuers with negative bias, at 9.5%. The U.S. region came in at 14.1%.