January 2022 Industry Monitor

Download the January Industry Monitor infographic below.

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

Corporate credit quality is in good health, according to credit consensus opinion this month.

Financials and Corporates both showed a higher instance of improvements than deteriorations, with ratios of 1.6:1 and 1.7:1 respectively.

At an industry level, only Telecommunications showed overall deterioration, and this was extremely marginal with an improving to deteriorating ratio of 1:1.1.

Oil & Gas came out on top, with a ratio of 3.2:1. Other strong showers included Basic Materials at 2.1:1 and Consumer Goods and Technology, both at 1.8:1.

North American Oil & Gas takes the lion’s share of the credit for the industry’s strong showing, with US firms at a positive ratio of 7:1 and Canadian firms at 5.5:1. UK Oil & Gas firms were almost neutral, with a ratio of 1.1:1. This regional strength was also reflected at an overall Corporate level.

Construction & Materials was comparatively the weakest sector, at 1.1:1 improvements to deteriorations, though this still falls within positive territory. Travel & Leisure also had a mild month, at 1.2:1 – though this is a welcome change from a slew of negative ratios in recent history.

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.

For full details, please download the January Industry Monitor infographic here:

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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.