April Credit Update: Consensus Downgrades Outnumber Upgrades In Corporates And Financials


Credit Benchmark has published the latest monthly credit consensus data (from March 2018), with 22 contributor banks. The set of bank-sourced credit views (CBCs*) has increased by 25%, and now covers almost 19,000 separate legal entities.

 

Monthly consensus upgrades and downgrades (including Funds):

  • 885 obligors improved their credit standing by at least one notch.
  • 764 obligors deteriorated.
  • 216 moved more than one notch.
  • The frequency of upgrades and downgrades has increased.

Last month showed improvements across 326 obligors and deterioration across 237, with 37 moving by more than one notch.

 

Industries:

  • Downgrades dominate upgrades in eight out of ten reported industries.
  • Industries showing a deterioration in credit quality include:
    • Consumer Goods with 14 upgrades and 50 downgrades.
    • Health Care with 7 upgrades and 27 downgrades.
    • Financials with 124 upgrades and 183 downgrades.

 

  • The industries showing improvements are:
    • Basic Materials with 32 upgrades and 26 downgrades.
    • Technology with 16 upgrades and 15 downgrades.

 

 

*Credit Benchmark Consensus (“CBC”): this is a 21-category alphanumeric scale based on bank-sourced one-year probability of default estimates.  It is similar to the scale used by the main credit rating agencies, so that a CBC of bbb is approximately equivalent to BBB reported by S&P and Fitch, and Baa2 reported by Moody’s

 

Disclaimer: Credit Benchmark does not solicit any action based upon this report, which is not to be construed as an invitation to buy or sell any security or financial instrument. This report is not intended to provide personal investment advice and it does not take into account the investment objectives, financial situation and the particular needs of a particular person who may read this report.


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