Fallen Angels and Rising Stars: October 2021
Consensus data show ongoing shuffling within corporate credit, but the balance is slightly in favour of Rising Stars as a growing number of firms see their credit status shift from high-yield to investment-grade.
Fallen Angels and Rising Stars: Shifting Corporate Credit
Credit volatility remains in the picture for global corporates. The latest consensus data show increases in both the number of Fallen Angels – companies that have seen their credit scores fall from investment-grade to high-yield status – and Rising Stars – companies that have risen from high-yield to investment grade.
Fallen Angels and Rising Stars: Credit Volatility Persists
Credit volatility remains in the picture for global corporates. The latest consensus data show increases in both the number of Fallen Angels – companies that have seen their credit scores fall from investment-grade to high-yield status – and Rising Stars – companies that have risen from high-yield to investment grade.
Sector Risks Revealed in Fallen Angels and Rising Stars
The Fallen Angels and Rising Stars Monthly Monitor reflects shifts to and from investment-grade and high-yield status for global corporates. While corporate credit risk has been improving across many industries, data from individual sectors may provide a clearer picture of trends in the months ahead.
Corporate Credit Stuck in Holding Pattern: Fallen Angels and Rising Stars
Consensus credit data has indicated improving credit quality for global corporates in the last few months, however the latest data update paints a more nuanced picture.
Fallen Angels Dwindle While Rising Stars Continue to Ascend: Corporate Credit
The pandemic-fuelled deterioration in credit quality for many corporations may be coming to an end. Credit Benchmark noted early signs of improving credit quality last month. The latest consensus data update provides more evidence that corporate credit quality is improving across a number of sectors.
Is Corporate Credit Quality Improving? Fewer Fallen Angels, More Rising Stars
The COVID era has caused corporate credit quality to shift rapidly between investment-grade and high-yield in either direction – and for some companies, to shift right back again, suggesting a premature upgrade or downgrade. But the latest data from Credit Benchmark suggest consensus estimates may be improving overall.
COVID Crisis Continues to Shuffle the Deck on Corporate Credit Quality
The COVID-19 crisis continues to spark a great deal of volatility in corporate credit sentiment. The ranks of Fallen Angels (companies that have fallen from investment-grade to high-yield status) and Rising Stars (from high-yield to investment-grade) have
fluctuated over the course of the last 12 months.
‘Fallen Angels’ in Hard-Hit Travel Sector Stage a Recovery
As one of the industries most impacted by the COVID-19 pandemic, 44% of global Travel & Leisure companies with a Consensus rating fell from investment grade to high yield in 2020. Some of these companies have shown resilience however, with nearly 10% of these ‘fallen angels’ migrating back into investment grade at a later point in the year.
Recovering Fallen Angels and Faltering Rising Stars
COVID has led to an unprecedented number of credit downgrades (Fallen Angels). While some firms have emerged COVID winners, credit upgrades (Rising Stars) have so far been in a minority. But with vaccines now being rolled out, an end to the economic crisis could be in sight even for some of the hardest-hit sectors.
