August 2022 Industry Monitor

Download the latest Industry Monitor below.

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

Global Financials and Global Corporates both enjoyed a predominance of credit improvements this month; setting the tone for the broader industry update. Financials showed a ratio of improvements to deteriorations of 1.5:1, with Corporates slightly behind with a ratio of 1.4:1.

Of the industries, Oil & Gas firms were the top performers, with 2.4 improvements to every deterioration. Close behind were Basic Materials firms, with a ratio of 2:1. Industrials were the next most positive group, with a ratio of 1.4:1 improvements to deteriorations. The only industry that demonstrated net negative credit quality was Telecommunications, with a modestly negative ratio of 1:1.1.

The sector breakdown demonstrates that US Oil & Gas firms were responsible for the strong credit showing for the broader industry – the ratio this month for this group of firms is 3.5:1 improvements to deteriorations. Conversely, UK Oil & Gas firms dragged the average down somewhat, with a negative ratio of 1:1.2. All other sectors showed positive credit ratios this month, with Canadian Corporates and US Corporates also showing strong improving trends, with ratios of 3:1 and 1.5:1 respectively.

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.