April 2023 Industry Monitor

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Credit Benchmark have released the end-month industry update for end-March, based on the final and complete set of the contributed credit risk estimates from 40+ global financial institutions.

Both Financials and Corporates credit quality showed a bias towards net credit improvement this month, with a positive ratio of 1.1 improvements to each deterioration.

Amongst the industries, the top performer was once again Oil & Gas, with a positive ratio of 1.6 improvements to each deterioration. Basic Materials and Consumer Services were the next strongest, with positive ratios of 1.3:1 and 1.2:1 respectively. Health Care and Telecommunications both stand out with a negative ratio of 1.5 deteriorations to each improvement. Utilities, Technology and Consumer Goods also showed a bias toward credit deterioration.

At the sector level, US Oil & Gas stands out with a positive ratio of 3.4 improvements to each deterioration. Conversely, UK Oil & Gas stands out with a negative ratio of 2.2 deteriorations to each improvement. Travel & Leisure firms continue to reap the benefits of a resurgence of personal and business travel bookings, with a positive ratio of 1.5 improvements to each deterioration. Canada Corporates showed a bias towards credit deterioration, with an improving to deteriorating ratio of 1:1.7.

In the update, you will find:

  • Credit Consensus Distribution Changes: The net increase or decrease of entities in the given rating category since the last update.
  • Credit Transition: Assesses the month-over-month observation-level net downgrades or upgrades, shown as a percentage of the total number of entities within each category.
  • Ratio: Ratio of Improvements and Deteriorations in each category since last update, calculated as Improvements : Deteriorations.
  • IG to HY Migration: The number of companies which have migrated from investment-grade to high-yield since the last update (known as Fallen Angels).

Credit Benchmark will continue to provide regular reports on these migration rates. If you have any questions about the contents of this update, please get in touch.

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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.