Download full May End-of-Month Credit Update infographic below.
Credit Benchmark has released the latest end-of-month consensus credit data (from April 2020), based on the final and complete set of contributed credit risk estimates from 40+ global financial institutions. This final update takes into account the credit movements of ~26,000 separate legal entities.
In the update, you will find:
- Opinion Indicator: Assesses the month over month observation-level net downgrades or upgrades.
- Ratio: Ratio of Deteriorations and Improvements calculated as Deteriorations / Improvements
- Distribution Changes: The increase or decrease in the percentage of entities in the given rating category
- IG to HY Migration: The absolute and relative movement from investment-grade to high-yield
Compared to the figures seen in our mid-month flash update, the final update shows:
- The bias towards deterioration flagged by the opinion indicator ratio is roughly unchanged in both Corporates (5.3:1) and Financials (3.2:1)
- The opinion indicator marks the most impacted industries:
- There is an 19.3:1 deteriorating/improving ratio for Oil & Gas entities (down from 31.6:1 in the flash update). This is the largest ratio difference of the industries but also the biggest ratio drop compared to the mid-month flash update.
- There is a 7.2:1 deteriorating/improving ratio for Consumer Goods (up from 6.1:1).
- There is a 6.6:1 deteriorating/improving ratio for Consumer Services (down from 6.9:1).
- Telecommunications again shows the only positive ratio in favour of improvements, at 0.7:1 deteriorating/improving (down from 0.8:1 mid-month).
- The percentage of Investment Grade (IG) entities migrating to High-Yield (HY) increased for most of the industry cuts excepting Healthcare, Technology and Telecommunications which remained the same since mid-month.
- Consumer Services again showed the strongest tendency to transition to HY with 5.5% of IG entities migrating (up from 4.9%).
- Travel & Leisure is still the most impacted sector with 14.9% of IG entities being downgraded to HY (unchanged from mid-month).
- Canadian Oil & Gas showed 43 downgrades and no upgrades, and 6.1% of IG entities in this group migrated to HY.
- The biggest jump in IG to HY transitions from the mid-month update was in Canadian Corporates which doubled from 2.2% to 4.4%.
Credit Benchmark will continue to provide regular reports on these migration rates. If you have any questions about the contents of this update, please get in touch.
