Corporate credit quality maintained a bias towards net credit improvement this month – but more instances of deterioration have crept in at the industry level than what was seen last month. Corporates and Financials showed similar credit movement this month, with ratios of 1.3:1 and 1.4:1 respectively.
Amongst the industries, the top performer was once again Oil & Gas, with a positive ratio of 3.1 improvements to each deterioration. Basic Materials were the next strongest, with a ratio of 1.7:1. This month, two industries saw net credit deterioration, with Consumer Services worse off at 1:1.5 improvements to deteriorations. Telecommunications and Utilities both remained neutral.
Oil & Gas credit strength was reflected at the sector level, with UK, US and Canadian firms all showing high positive ratios. Travel & Leisure followed, with a ratio of 1.7 improvements to each deterioration. There were no instances of net deterioration amongst the sectors, however US Corporates and Construction & Materials both 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.