May Credit Update: Consensus Upgrades Outnumber Downgrades

Credit Benchmark has published the latest monthly credit consensus data (from April 2018), with 24 contributor banks. The set of bank-sourced credit views (CBCs^*) now covers almost 19,500 separate legal entities.

Monthly consensus upgrades and downgrades:

• 556 obligors improved their credit standing by at least one notch.
• 375 obligors deteriorated.
• 97 moved more than one notch.
• The frequency of upgrades and downgrades has decreased.

Last month showed improvements across 885 obligors and deterioration across 764, with 216 moving by more than one notch.

Industries:

• Upgrades dominate downgrades in seven out of ten reported industries.
• The industries showing an improvement in credit quality include:
  • Oil and Gas with 40 upgrades and 16 downgrades.
  • Technology with 18 upgrades and six downgrades.
  • Financials with 164 upgrades and 118 downgrades.

• The industries showing deteriorations are:
  • Consumer Services with 14 upgrades and 26 downgrades.
  • Industrials with 36 upgrades and 47 downgrades.
  • Utilities with eight upgrades and nine 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.