David Carruthers, Author at Credit Benchmark Archive - Credit Benchmark

Supply Chain Crisis: Food Producers Credit Trends

Global food prices are at a 10-year high, pushed up by the pandemic. With climate change a growing issue, prices are likely to stay raised. Consensus credit data shows food producers have weathered COVID well, with many rated higher than the major credit rating agencies and continuing to improve.

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Rising Interest Rates and Credit Upgrades

With a potential UK interest rate hike on the cards, a growing number of central banks are seeing inflation as a key near-term risk to economic stability. With net credit upgrades currently in balance, and a growing number of countries imposing monetary tightening, there is a risk that the global net credit balance turns sharply negative.

Restaurants & Bars: US Recovery Pulls Ahead of UK

The hospitality industry has suffered from prolonged closures, reduced capacity, supply issues and staff shortages during COVID, damaging an already low margin business. For the UK, Brexit has magnified these effects. Analysis of consensus credit data shows a disparity in recovery between the US and UK.

Sovereign Credit Risk and the Cost of COVID

A potential US Government shutdown is focusing attention on Sovereign credit risk, with a risk to US Treasury bond payments. A missed payment would be a major market event, but the broader issue is how Governments around the world handle the cost of COVID. The latest consensus data examines credit risk trends for Global Sovereign Governments, plus compares consensus vs CRA ratings for 12 major economies.

Survival of the Fittest in the Leveraged Loan Market

There are fears that investors in the broader high yield space are not being properly compensated for the risks. Though recent private equity investments have focused on firms that have weathered the pandemic with stable revenues and strong cash flows, which could boost the average credit quality of leveraged loan assets, the latest consensus credit data shows a more mixed picture.

Marine Transportation: Turning the Credit Tide?

Shipping container unit costs have skyrocketed and delivery times doubled in the past 18 months, with the pandemic causing port closures, trade flow disruptions and capacity reductions. Consensus credit data tracks the credit trend of Global Marine Transportation companies and suggests that the sector may be a leading indicator for broader corporate credit risk.

Prolonged Credit Turbulence for Global Airlines

Air travel is currently running at about 50% of its pre-pandemic peak and the sector still faces uncertainty from new virus variants, patchy tourism traffic and a shift in business travel norms. While many Global Airlines are unrated by traditional agencies, consensus credit risk data shows that 80% of the sector is below investment grade – but some remain good credit risks.

Credit Strength Dampens Wildfire Risk for US Electricity Firms

Wildfires are growing in intensity and frequency, and in the US are sometimes attributed to outdated electricity infrastructure, presenting a legal hurdle for companies in the sector. Addressing these issues requires investment, and companies with stronger credit ratings are better placed to fund the necessary capital spending. This note looks at the credit profile and recent trends for 371 US electricity companies.

Credit Trends: Focus on Australia

Australia has so far weathered the Covid storm in reasonable shape, and is one of the few Sovereigns rated AAA by the three largest traditional rating agencies. A credit consensus rating of aa+ reflects a slightly more cautious Bank view. This research analyses a number of Australian industries, sectors and companies to demonstrate the Covid effect on national credit quality comparative to global trends.

Global Credit Recovery Gathers Pace

As vaccine rollout varies globally, it is clear that the economic bounceback from Covid will be led by the largest and most developed economies. Overall vaccination figures show that the global pandemic is far from over; but trends in the credit consensus are already giving some clues to the shape of the expected global economic recovery.

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Credit Benchmark brings together internal credit risk views from over 40 leading global financial institutions. The contributions are anonymized, aggregated, and published in the form of consensus ratings and aggregate analytics to provide an independent, real-world perspective of credit risk. Risk and investment professionals at banks, insurance companies, asset managers and other financial firms use the data for insights into the unrated, monitoring and alerting within their portfolios, benchmarking, assessing and analyzing trends, and fulfilling regulatory requirements and capital.

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