Our credit market research encompasses ratings performance indicators (including upgrades and downgrades, defaults, outlook changes, weakest links, rising stars, and fallen angels) alongside default and issuance forecasts and financing conditions coverage.
Our "Risky Credits" series focuses on corporate issuers rated 'CCC+' and lower. Because many defaults are of companies in those categories, ratings with negative outlooks or on CreditWatch negative are even more important to monitor.
NORTH AMERICA
Rating actions picked up from the previous week and downgrades more than doubled, with 12 out of 15 being on speculative grade issuers. Total rating activity remained net positive thanks to the pickup in outlook revisions to positive and positive CreditWatch placements.
There were no fallen angels or rising stars last week. Meanwhile, downgrades included two new risky credits, U.S. radio broadcaster Cumulus Media Inc. and French chemical producer Lune S.a.r.l.
There were two defaults last week, both on U.S.-based issuers: Spirit Airlines Inc., an ultra-low-cost airline, defaulted as it filed for bankruptcy, and data and analytics provider Dodge Construction Network LLC was downgraded to ‘SD’ following a distressed exchange.
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A prolonged trend of upgrades outnumbering downgrades resumed in September after an August pause. Investment-grade trends were particularly strong, with just three downgrades in September.
Financial institutions led September upgrades, and all but one of those upgrades came from outside the U.S. Downgrades were concentrated in media and entertainment--specifically, in the business services subsector and the radio, TV, and broadband subsector.
Potential rising stars momentum has moderated, while potential fallen angels have risen sharply to 38. Commercial real estate challenges are of particular focus among financial institution potential fallen angels.
There are clear regional differences among potential downgrades. Consumer products and health care lead in the U.S., while the chemicals, packaging, and environmental services sector is tilted toward Europe.
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