The February Monthly Credit Outlook looks at recent credit trends and highlights seen in the consensus dataset. This month, credit risk is elevated but some positive surprises may be possible.
Pension funds are traditionally well capitalised and usually considered investment grade. Many of the companies that sponsor those funds are weaker credits, and a significant number are non-investment grade. This means that some of the largest DB pension funds in the UK cannot rely on their sponsors for cash support to meet margin calls.
Inflation dominated Q3 financial news, and the resulting short rate squeeze is biting while credit volatility is rising and the COVID recovery is running out of steam. Risk indicators are high in the UK, and oil and gas price volatility has brought havoc to Europe. In North America, weaker credit trends are appearing in several sectors. Believe it or not, there are some bright spots amidst this turmoil. This whitepaper elaborates on some of these trends and shows where credit could be headed next.
In the newly published special report from Structured Credit Investor (SCI), Mark Faulkner, co-founder, Credit Benchmark, investigates how Credit Consensus data can help support growth in SRT activity.
Modern Slavery, Child Labor and Human Trafficking Statement Credit Benchmark believes that human rights are an absolute and universal standard, and everyone has a basic
UK Industrial firms are in a positive position for the fourth time this month, suggesting a trend of improvement is forming. EU Industrial firms have registered another positive CCI for this month, which is the thirteenth consecutive instance of a positive score. Consensus opinion on credit quality for US Industrial firms is still in positive territory, although their CCI score has significantly decreased from last month.
European Governments are pledging hundreds of billions of Euros in financial aid to power generators and distributors, plus support for consumers facing massive energy price hikes. But an even larger crisis may be lurking in European energy trading, with the FT reporting sector margin requirements as high as €1trillion – vastly in excess of current sector liquidity.
This whitepaper from Credit Benchmark illustrates the global credit trends in the second quarter of 2022. Widening credit spreads show a major shift to a “risk-off” mindset, as supply shocks and rate hikes show no sign of abating. Corporate default rates are likely to spike, and across sectors correlations between default risk are changing. This whitepaper tracks these shifts across many otherwise unrated countries/sectors, as well as illustrating other global trends in Q2 2022.
The 2022 technology stock meltdown brought widespread financial damage. Markets are repricing the new reality of geopolitical tension, inflation and scarce money. But has the selloff brought opportunities?
Credit Benchmark have released the June 2022 Credit Consensus Indicators (CCIs). The positive trend continued in June for both EU and US Industrial firms. EU Industrials have been modestly improving in recent months, while US firms remain steady. UK Industrial firms are experiencing some instability, with alternating instances of improvement then deterioration, month-on-month.
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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.
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