Global Corporates and Global Financials both saw credit quality improvement this month, with Financials performing marginally better with a ratio of improvements to deteriorations of 2:1, compared to Corporates with a ratio of 1.8:1.
Following a month-to-month trend, Oil & Gas firms again performed the best of the industry groups, with 3.1 improvements to every deterioration. Basic Materials and Technology were the next best performers, with ratios of 2.2:1 and 2.1:1 respectively. Several other industries showed similar levels of improvement, with Telecommunications finishing at the bottom of the group with the only negative ratio of 1:1.1 improvements to deteriorations – a small margin of difference.
Of the sectors, Canadian Oil & Gas firms were weighted heavily towards credit improvement, with a stand-out ratio of 36:1 (with fewer than 1% of the total pool deteriorating this month). US Oil & Gas showed another strong instance of net improvement at 4.3:1. Travel & Leisure firms are setting their pandemic-related woes firmly behind them as holidaymakers enthusiastically make summer travel plans, resulting in a ratio of 2.5 credit improvements to each deterioration this month. General Retailers are also enjoying improved fortunes with a ratio of 1.8:1.
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.