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 rating actions jumped last week with upgrades and positive outlook revisions outnumbering negative rating actions 2:1.
Upgrades reached their highest weekly number since the end of August and were diversified across 10 sectors. They included one rising star, PPF Telecom Group B.V.
All downgrades happened to speculative-grade issuers, as the investment-grade downgrade ratio hit its lowest level since Q4 2021. Three of the downgrades last week were also new risky credits, all U.S. based issuers in health care, media and entertainment, and high technology.
There were three defaults, including one confidential issuer. The two public defaults were by WideOpenWest Finance LLC and American Tire Distributors Inc. in the telecommunications and automotive sectors, respectively.
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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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