Credit Benchmark have released the end-month credit industry monitor for end-February, based on the final and complete set of the contributed credit risk estimates from ~40 global financial institutions.
Credit Benchmark covers 40,572 non-financial Corporate firms, 93% of which are not rated by a credit rating agency. The credit trend for this group was close to balanced last month, with an improvements to deteriorations ratio of 1.1:1. Financial firms (of which we cover 10,642, 82% of which are not publicly rated), tipped in the opposite direction, with a very slight skew towards deterioration and a ratio of 1:1.1.
Balance was seen throughout the different industries, with the majority of the categories registering neutral or near-neutral credit ratios of 1:1 or 1.1:1. Technology firms (covering 1,492 firms, 85% unrated) and Utilities (1,611 firms, 73% unrated) edged out slightly in front, both with a positive ratio of 1.2 improvements to every deterioration. Healthcare (1,406 firms, 89% unrated) was the worst performer, with a mildly negative ratio of 1:1.3 improvements to deteriorations, closely followed by Telecommunications (478 firms, 78% unrated), with a ratio of 1:1.2.
There was slightly more pronounced movement at the sector-level, with Travel & Leisure (1,715 firms, 93% unrated) coming out on top with a positive ratio of 1.5:1 improvements to deteriorations. UK Corporates (8,486 firms, 97% unrated), and Construction & Materials (3,286 firms, 97% unrated) followed, with ratios of 1.3:1. Canadian firms fared less well, with Canada Oil & Gas (169 firms, 78% unrated) showing the strongest negative ratio of 1:2, and Canada Corporates (1,761 firms, 91% unrated) showing 1:1.5 improvements to deteriorations.
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.
