Bangkok--2 Mar--Standard & Poor's
The number of global issuers poised for downgrades continues to decline. It reached 777 in February, down from 804 in January. February's tally is the lowest in 16 months, said an article published today by Standard & Poor's, titled "Downgrade Potential Across Credit Grades And Sectors (Premium)."
Potential downgrades are defined as entities that have either a negative outlook or ratings on CreditWatch with negative implications across rating categories 'AAA' to 'B-'.
"The 777 potential downgrades are 144 fewer than the average of the trailing 12 months and 200 fewer than the total a year ago," said Diane Vazza, head of Standard & Poor's Global Fixed Income Research Group. "Downgrade potential peaked in March 2009 at 1,025 issuers globally, when the credit markets began to bottom out and slowly move toward stabilization."
Geographically, the U.S. continues to top the list of potential bond downgrades, with roughly 51% of ratings showing downside risk (followed by Europe, with 26%).
The onset of a recession corroborates the increasing propensity for downgrades, characterized by a gradual pickup in negative bias. The increase in potential bond downgrades in the 2001 recession was accompanied by an expected decline of those poised for upgrades. This trend is echoed in the most recent recession, with a more prolonged curve, reflective of its length and severity.
The standard version of this article is part of our standard Global Fixed Income Research content. The premium version contains expanded analysis of the article's most significant points, typically broken out by sector and region. Also in the premium version are in-depth charts and tables, the underlying data of which are available for download. Ratings information can also be found on Standard & Poor's public Web site by using the Ratings search box located in the left column at www.standardandpoors.com. Members of the media may request a copy of this report by contacting the media representative provided.
Media Contact:
Mimi Barker, New York (1) 212-438-5054,
[email protected]
Analyst Contact:
Diane Vazza, New York (1) 212-438-2760