Data At a Glance Archives Archive

UK Consumer Services: Interest Rate Impact

September 19, 2023

After a 6-month run of positive credit outlook, UK Consumer Services are experiencing two consecutive months of negative credit outlook. The UK Services PMI reported a score of 49.5 in August, suggesting business activity falling for the first time since January. The impact of rising interest rates on client demand could be one of the causes for this downturn. Keep up to date with recent credit trends with our Monthly Credit Outlook, which looks at highlights seen in the consensus dataset.

Financials Credit Risk in India and China

September 6, 2023

The Chinese financial sector is currently grappling with bad debts in the Commercial Real Estate sector. India is bucking this trend, and strong growth in the broader Indian economy has driven a 5-month winning streak in the Indian equity market. But recent Central Bank tightening of capital requirements is likely to temper Indian GDP growth; and as the chart shows the 15%+ improvement in Indian Financial credit risk looks as if it has run its course.

Leveraged Loans: Widening Gap

August 15, 2023

This chart plots the credit trend of the Credit Benchmark Leveraged Loan Index, made up of 563 issuers in the Credit Suisse Leveraged Loan Index. The credit index tracked the Credit Suisse Leveraged Loan Total Return in 2021 to early 2022. However, credit has deteriorated by approximately 8% in the past year while total return is up nearly 6%. Read more in the latest Monthly Credit Outlook, which looks at recent credit trends and highlights seen in the consensus dataset.

China Troubles: Asia Corporates Impact

August 9, 2023

Economic growth in China grew at a sluggish pace in the second quarter. Latest news shows China’s exports to the rest of the world falling at steepest pace since Feb-20, deepening troubles for the world’s second-largest economy. Credit Benchmark data shows Asia Corporates posting two consecutive months where companies showing credit deterioration outnumber improvements. This chart shows the % net balance; the latest month shows a deeper move into the red.

Monthly Credit Outlook: August 2023

August 9, 2023

This chart shows global trends for average Probability of Default (PDs) for the past 12 months for Corporates vs. Financials vs. Sovereigns. Globally, credit trends are still negative. The Monthly Credit Outlook looks at recent credit trends and highlights seen in the consensus dataset. It also covers Industry and Sector Turning Points, Credit Volatility, Leveraged Loans and more.

Wildfires: Negative Impact on Insurance

August 1, 2023

Temperature records are being shattered across Europe as well as the Globe. Property and Casualty Insurance companies will be negatively impacted as Southern Europe and Canada is gripped by the ongoing resultant wildfires. This chart is based on the balance between improving and deteriorating companies within the Canada Property and Casualty Insurance Credit Benchmark Index. Canada Property and Casualty Insurance credit is showings its first negative outlook since Sep-22. Other countries and regions are expected to follow.

Food, Beverages & Farming: Declining

July 5, 2023

Drought, fires, fertilizer shortages, supply chain issues, and changing consumer tastes are putting increasing pressure on the agriculture and forestry subsectors. Plus, the impact of climate change has been exacerbated by the Ukraine war. These issues are now hitting credit risk in the “4Fs”: Food, Farming, Fishing, and Forestry.

US Commercial Real Estate

June 21, 2023

Warning signs continue to flash in the US Commercial Real Estate market. Office sectors are worst affected by the persistence of hybrid working. The worst REITs credit performer is the combined Industrial & Office category. This suggests that any Industrial improvements have been more than weighed down by problems in the Office sector.

Sovereign, Financial and Corporate Default Risks

May 31, 2023

Latest Credit Benchmark data shows that the credit rating of a country’s financial system is heavily influenced by that of the Sovereign, and, in countries with the strongest credit, the Financial sector is stronger than the Corporate sector.

AI: Disruption Now, Efficiency Later

May 18, 2023

Is AI all promise, no profit? The Economist suggests equity markets are unconvinced as to the immediate value of AI tech. In credit terms, AI-focused firms are outperforming other Global Tech firms; keeping pace with Global Corporates.

Leveraged Loans: Credit Trends

May 11, 2023

The charts are based on a universe of 4,000+ Leveraged Loan issuers. The credit trends of these Leverage Loan issuers are being compared with their respective Credit Benchmark index. Global Corporates have been underperforming the main index, since late 2022, while Global Financials began to decline in Q3 2022.

US Regional Banks: LDR correlates with higher credit risk – with some exceptions

April 11, 2023

As you would expect, consensus credit risk data shows that US regional banks with higher LDRs generally have higher credit risk, higher probability of default, and, in the lead up to the SVB collapse, larger declines in share price. But LDRs are only part of the story.

AT1 Bonds: Investor risk means stronger banks

March 23, 2023

The chart shows two-year cumulative change in the (unweighted) average probability of default for (1) GSIBs and (2) AT1 issuers (based on Invesco AT1 ETF constituents). It shows that both series peaked in Q2 2022, and have since shown a slight deterioration. However, the GSIB deterioration is slightly steeper and the AT1 group has recently shown a modest improvement.

Credit Distribution: Apple Suppliers

March 22, 2023

This chart is based on 71 of Apple suppliers. There has been a negative shift in their credit distribution, compared to last month. The percentage of entities with an a credit rating has decreased from 12.1% last month to 11.6% currently.

Credit Trend: Apple Suppliers

March 14, 2023

This chart is based on 71 of Apple suppliers. Their combined credit shows a recent turning point. In the latest month, Apple suppliers shows a slight decrease in their credit trend. The percentage of entities upgrading has decreased, combined with an increase in the percentage of downgrades.

Credit Volatility: Stable to Down

March 8, 2023

PD volatility is a leading indicator for upgrades and downgrades. This chart shows the tail percentiles for default risk volatility, taken from the CB universe of more than 1000 credit indices, plus the CBOE Equity VIX. As the chart shows, large PD volatility spikes reflect economic stress, when notch changes are more likely to be downgrades or defaults. Similar to the VIX, credit volatility crept up in early 2022, but the Q4 downtrend continues.

Profit Elasticities vs. PD Change: Index Chart

February 28, 2023

This chart shows the elasticity of profits to rise in wages by sector compared with 3-month PD change. Personal Products, Nondurable Household Products and Telecommunications show credit deterioration despite the impact of higher wages being low on profit. Financial Services, Transportation Services and Consumer Goods show credit improvement despite the impact of higher wages being high on profit.

Renewable Energy: Credit Tide Turning?

February 21, 2023

Renewable energy is at the centre of efforts to tackle climate change, but there have been setbacks to growth. 80%+ of energy demand is still met by fossil fuels, with fossil fuel companies reporting record profits as global energy prices spike. In the past two years, renewable credit risk has deteriorated and traditional energy has improved. However, there are some signs that the credit tide may be turning.

Credit Volatility: Elevated, but below COVID highs

February 10, 2023

This chart shows the 99th percentile of 6 month trailing PD volatility, measured across more than 1,200 credit indices. Volatility trended higher again in early 2022, but is currently stable. This will be a key indicator in 2023

Key Global Trends: Sovereigns Lagging

February 10, 2023

Globally, Corporates have seen a stronger post-COVID rebound than Financials – but both are plateauing. Sovereign Governments, already grappling with COVID debts, have deteriorated in the past year.

Credit Indices Showing Increasing Default Risk

February 10, 2023

This chart shows the proportion of Credit Consensus indices with higher risk in the past twelve months. From an average of 30% for most of H1, the trend is now higher and December data shows a majority of indices are now deteriorating.

The End of 3G: A Credit Boost for US Telecoms?

January 18, 2023

US Telecommunications have recorded three consecutive months of credit deterioration, with this month’s CCI score being the lowest since Oct-18. With the 3G burden removed, the sector’s Big 3 are better placed to invest in future technologies with less strain on balance sheets.

Shopping Around the Christmas Tree: US Consumer Services and Goods

December 13, 2022

These CCIs figures show that US Consumer sectors are at a crossroads. But the Black Friday stats so far suggest a good December, at least for consumer goods; if that momentum can be maintained we could see more positive CCIs across the Consumer sector.

World Cup 2022: Global Distillers & Vintners vs. Global Beverages

November 28, 2022

This figure shows Distillers & Vintners sub-sector is slightly lower credit quality than the broader Beverages sector, and credit quality has been declining for most of 2022.

Credit Volatility: Defaults Set to Rise

October 27, 2022

Many credit portfolio managers expect default rates to be sharply higher in 2023, but the scale of the increase is still a major unknown A useful metric to anticipate rising defaults is credit volatility, measured by monthly percentage changes in default probability. This figure shows various measures of credit volatility, calculated from more than 800 aggregates derived from bank consensus credit ratings.

US Health Care: Not So Healthy?

October 5, 2022

As pandemic-related spending continues to fall, the US Health Care sector is beginning to show credit deterioration.

US Consumer Services: Trend of Net Improvement Ends

October 5, 2022

This month US Consumer Services firms ended their streak of 15 consecutive months of positive credit quality.

Transition Matrices (TMs): US Corporates

August 30, 2022

Transition matrices (“TMs”), derived from credit data, track the speed of full notch and multi-notch upgrades and downgrades over a set timeframe. The leading diagonal shows the proportion of US Corporates that had no change in credit rating – for example, 75.1% remained in the bbb credit category.

Correlation Matrices (CMs)

August 25, 2022

The figures show correlations between month-on-month PD changes for a small subset of US Corporate sectors from early 2018 to the start of the pandemic in 2020, and from the start of the pandemic in 2020 to the middle of 2022.

Declining Credit Quality: Is Global Tobacco Being Stubbed Out?

August 10, 2022

Global Tobacco credit quality has weakened by 3.4% month-on-month. The introduction of stricter tobacco measures globally, as well as COVID, all contribute to this change.

US Industrials: A Change in Trend

August 2, 2022

This month US Industrial firms ended their streak of 17 consecutive months of positive credit quality.

Tech Sector Meltdown & Credit

July 13, 2022

This chart plots the NASDAQ over the past two years against credit risk movements for the aggregates that cover some of the major technology companies.

Sovereign Credit Risk and Food Prices

June 30, 2022

A growing list of countries have already seen Sovereign ratings slide in the past two years due to COVID costs; some now face a real risk of outright default as the war in Ukraine drives food, fertilizer and energy prices higher.

Automobiles & Parts: Impact of Chip Shortage

June 16, 2022

Semiconductor supplies have not yet recovered from COVID disruption. This has caused problems for many industries, but the impact is becoming acute for manufacturers of automobiles and parts, as well as online car dealers and car rental companies.

US Energy Sector: Credit and Equity

May 24, 2022

This figure shows the relationship between Credit Consensus Ratings and US energy sector equity price changes in 2022.

US Corporates: High vs Low Debt

May 3, 2022

With US consumer prices growing at their fastest rate since 1981, the Fed is likely to implement at least a half-point interest rate increase this year. This will put further pressure on high-debt US corporate companies that have yet to recover from the impact of COVID.

EU Sovereigns: Credit Risk Changes Q1 2022

May 3, 2022

The Ukraine war is beginning to affect Sovereign credit risk – average European sovereign risk has deteriorated by 12% since the beginning of the year.

Earth Day: Ukraine War Pushes Energy Efficiency Rethink

May 3, 2022

The Ukraine war has boosted the need for renewable energy sources, including wind and solar power. Credit consensus data shows that wind companies are generally of better credit quality than solar companies.

Oil Price Volatility & Sovereign Credit

March 31, 2022

The chart shows nations where pre-war oil revenues (net of production costs) are more than 4% of GDP, plotted against Credit Benchmark (CB) consensus credit risk.

Russia – Ukraine Credit Shock Hits European Food Producers

March 22, 2022

The Russia-Ukraine conflict has impacted EU Food Products companies, with a 4% deterioration in average credit risk. The UK is down about 3%, and the Global aggregate is down just over 1%. North American (NA) Food Products actually improved – up 0.3% over the month.

Gender Diversity: Stronger Credits Have More Female Board Members

March 7, 2022

80% of the FTSE350 companies with consensus coverage meet a target of 33% women representation on their board. Of these, 81% are investment grade, which is 10 percentage points higher than companies who do not meet the target.

Most Banks Remained Strong throughout the Pandemic but Signs of Deterioration within Emerging Markets

February 10, 2022

The banking industry retained high credit quality throughout the pandemic with credit risk decreasing in 2021 for most countries.

Travel & Leisure Credit Risk Reached a Turning Point in 2021

February 8, 2022

Travel & Leisure companies felt the COVID crash more than most, and after a disastrous 2020, continued to increase in credit risk by a further 20% in 2021.

The World Turned Green: Upgrades Outnumbered Downgrades in Most Countries in 2021

February 5, 2022

There was a clear shift from credit risk downgrades to upgrades between 2020 and 2021 across the whole world with upgrades outnumbering downgrades by 3:2. However, the effect was not uniform for all countries.

Insurance Credit Risk

December 13, 2021

UK Insurance is riskier compared to EU and US

Home Construction: US Credit Outpaces UK

December 1, 2021

The post-pandemic “race for space” is driving strong demand for housing globally. The improving credit quality of North American Home Construction firms has outstripped their UK counterparts.

Covid and Supply Chain: the Sector Effect

November 17, 2021

The pandemic has had a significant negative effect on supply chains, and some sectors were impacted more than others. Big nondurable consumer goods saw limited impact, while manufacturing supply chains fared much worse.

COP26: Is Credit Risk Part of the Problem?

November 8, 2021

Sovereign credit risk shows a clear difference of about 5 notches between the Low and High impact countries on Swiss Re's Climate Economics Index. Corporates show very little difference.

US vs UK Restaurants & Bars

October 18, 2021

The hospitality industry has been a high profile COVID casualty, with US Restaurants & Bars initially hit harder compared to the UK - but the US group has since bounce backed stronger than the UK

Sector Overview: the Cost of COVID

October 13, 2021

Airlines and Hotels are two sectors most impacted by the COVID crisis, while Pharmaceuticals have been stable throughout the volatile period.

Sovereign Credit Risk

September 30, 2021

The reaction of Sovereigns to the start of the pandemic was milder compared to Financials and Corporates.

Marine Transportation

September 16, 2021

The steady decline from January 2020 is a noticeably early reaction to the Covid outbreak, pushing credit risk up by 25%

US Electricity

August 23, 2021

US Electricity: Entities with a CRA rating are typically two notches better than those without a CRA rating

Australian Financials

August 16, 2021

Australian Financials fared better under Covid and rebounded more strongly compared to Global Financials

US Commercial Real Estate

August 9, 2021

US commercial real estate : the COVID-19 crisis price drop is strongly correlated with increasing credit risk

The Big Short 2.0

August 9, 2021

The Big Short 2.0 : dramatic drop in US retail REITs credit quality and no signs of recovery

Nareit Index

August 9, 2021

Most of the office, retail and industrial REITs in the Nareit index are in IG with several HY exceptions