Upgrades outnumbered downgrades among speculative-grade corporate issuers in June, with 26 upgrades and 23 downgrades, reflecting issuers’ improving credit quality. The health care sector experienced the most downgrades, followed by the restaurants and retail sectors. On the other hand, the media and entertainment and leisure sectors had the most upgrades. The media and entertainment sector has experienced the most defaults so far in 2024 as lower-rated issuers continue to struggle with changing consumer preferences. AMC Entertainment Holdings Inc.'s weak credit measures, including its negative free operating cash flow and substantial debt burden, rendered its capital structure unsustainable. Some of the other defaults involved companies operating in subsectors experiencing secular declines. The preliminary trailing 12-month speculative-grade corporate default rate remained above its long-term average of 4.1% at 4.66% as of May 2024.