Corporate credit quality maintained a bias towards net credit improvement this month, with a positive ratio of 1.2 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 2.8 improvements to each deterioration. Health Care and Consumer Services were the next strongest, both with a ratio of 1.4:1. This month, two industries saw net credit deterioration, with Telecommunications at 1:1.7 improvements to deteriorations and Consumer Goods at 1:1.2. No industries remained neutral.
Oil & Gas credit strength was reflected at the sector level, with UK and US firms both showing high positive ratios. Canada Oil & Gas had no instances of deterioration this month. Travel & Leisure firms continue to reap the benefits of a resurgence of personal and business travel bookings, with a high positive ratio of 1.8 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.