This Week In Credit

Negative Rating Actions Ease, But Risks Remain

Positive rating actions exceeded negative ones for the first week since the end of April-- albeit by a narrow margin. Upgrades included one new rising star: HA Sustainable Infrastructure Capital Inc.

While just over half of upgrades were to investment-grade issuers, downgrades remained concentrated on the speculative-grade level, with nine downgrades to ‘B+’ and below. There were three new risky credits (issuers in the ‘CCC’ category), all based in the U.S. and two from the consumer products sector.

There were three defaults last week, with the two public defaults due to distressed exchanges. The largest default by debt volume last week was France-based telecommunications operator, Altice France S.A.

This Month In Credit

Wavering Momentum

Upgrades exceeded downgrades in April for the fourth month in a row but declined by 24%. Net bias (positive minus negative bias) edged downward (to negative 5.0%) for the second month in a row, driven by a gradual decline in positive bias.

Sovereigns had the largest increase in negative bias, driven by four negative revisions including a new potential fallen angel.

New risky credits (issuers downgraded into the 'CCC+' and below rating category) increased by eight in April--the greatest number of new risky credits this year and bringing the total to 24% above year-to-date 2024

Corporate defaults decreased to eight in April from nine in March, as the year-to-date count (34) reached a two-year low and is trending below the five-year average of 42.