Corporate credit quality maintained a bias towards net credit improvement this month, with a positive ratio of 1.1 improvements to each deterioration. Financials showed a neutral ratio of 1:1 improvements to deteriorations.
Amongst the industries, the top performer was once again Oil & Gas, with a positive ratio of 1.6 improvements to each deterioration. Utilities and Consumer Goods were the next strongest, both with a ratio of 1.3:1. This month, three industries saw net credit deterioration, with Telecommunications standing out with a negative ratio of 3.9 deteriorations to each improvement. Industrials and Consumer Services remained neutral.
Oil & Gas credit strength was reflected at the sector level, with US and Canada firms both showing high positive ratios. Conversely, UK Oil & Gas firms dragged the average down somewhat, with a negative ratio of 1:1.1.
Travel & Leisure firms continue to reap the benefits of a resurgence of personal and business travel bookings, with a positive ratio of 1.2 improvements to each deterioration. There were no instances of net deterioration amongst the sectors, however Construction & Materials came in at neutral.
In the update, you will find:
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.