July Credit Update: Consensus Upgrades Outnumber Downgrades


Credit Benchmark has published the latest monthly credit consensus data (from June 2018), with 24 contributor banks. The set of bank-sourced credit views (CBCs*) now covers almost 21,000 separate legal entities.

Monthly consensus upgrades and downgrades:

  • 407 obligors improved their credit standing by at least one notch.
  • 244 obligors deteriorated.
  • 70 moved more than one notch.
  • The frequency of upgrades and downgrades has increased.

Last month showed improvements across 319 obligors and deterioration across 297, with 75 moving by more than one notch.

Industries:

  • Upgrades dominate downgrades in eight out of ten reported industries.
  • The industries showing an improvement in credit quality include:
    • Oil & Gas with 30 upgrades and seven downgrades.
    • Health Care with 13 upgrades and two downgrades.
    • Utilities with 20 upgrades and six downgrades.
  • The industries showing deteriorations are:
    • Telecommunications with four upgrade and six downgrades.
    • Technology with seven upgrades and eight downgrades.

* CBC = Credit Benchmark Consensus; a 21-category classification which is explicitly linked to probability of default estimates sourced from major banks. A CBC of bbb+ is broadly comparable with BBB+ from S&P and Fitch or Baa1 from Moody’s.

Disclaimer: Credit Benchmark does not solicit any action based upon this report, which is not to be construed as an invitation to buy or sell any security or financial instrument. This report is not intended to provide personal investment advice and it does not take into account the investment objectives, financial situation and the particular needs of a particular person who may read this report.


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