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
Positive outlook and CreditWatch changes more than doubled and negative ones nearly halved, with all but two of the negative changes to investment-grade issuers.
All but one of this week’s upgrades were to speculative-grade issuers with no new rising stars. Three of the upgrades were to telecommunication issuers, with two in Eastern Europe, the Middle East, and Africa; and one in the U.S.
Downgrades primarily occurred in the U.S. and included two fallen angels; this increases the number of fallen angels year-to-date above the number from last year for the first time since March. Fallen angels included consumer products issuer VF Corp.; and chemicals, packaging, and environmental services issuer Celanese Corp.
There were two defaults last week, both in the U.S., because of a distressed exchange; capital goods issuer Sensience Inc., and telecommunications issuer Dish Network Corp.
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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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