September 2022 Industry Monitor

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

The balance of upgrades and downgrades has been very even across Global Corporates and Global Financials this month, with Financials showing a neutral ratio of 1:1 improvements to deteriorations, while Corporates were ever so slightly positively biased, with a ratio of 1.1:1.

Amongst the industries, the strongest instance of net improvement was seen in Basic Materials, with a ratio of 1.4:1. Most of the other industries hovered close to neutral, with the exception of Utilities which bucked the trend with a negative ratio of 1:1.6 improvements to deteriorations.

In the sectors, Canada Corporates were the worst performers, with a negative ratio of 1:2.9 improvements to deteriorations. This movement was largely driven by Canada Oil & Gas firms, which showed a similar negative ratio of 1:3.1. US Corporates fared slightly better, though still negative, at 1:1.6, while the US Oil & Gas subset showed a ratio of 1:1.5. UK Corporates emerged the winner this month with a modest positive ratio of 1.1:1 improvements to deteriorations.

Travel & Leisure firms continue to reap the benefits of a resurgence of personal and business travel bookings, showing the highest positive ratio this month at 2:1 improvements to deteriorations.

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 latest 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.