Downgrades outpaced upgrades among speculative-grade corporate issuers in August, with 29 downgrades and 17 upgrades, highlighting continued sector divergence and the weakness of borrowers at the lower end of the credit spectrum. The high technology sector experienced the most downgrades, while the media, entertainment, and leisure, health care, and business and consumer services sectors experienced the most upgrades. The number of downgrades into the ‘CCC’ rating category among U.S. and Canadian corporate issuers increased to seven in August, which is the second highest monthly total since May 2024 (eight downgrades). The high technology sector led with two downgrades, with one issuer facing continued cash burn and a high interest burden while the other was negatively affected by weak interest coverage and elevated refinancing risk. Deteriorating credit metrics amid macroeconomic headwinds is a recurring theme among these issuers.