Download the May Industry Monitor below.
Credit Benchmark have released the end-month industry update for end-April, based on the final and complete set of the contributed credit risk estimates from 40+ global financial institutions.
Global Corporates and Global Financials both saw credit quality improvement this month, with Financials performing marginally better with a ratio of improvements to deteriorations of 2:1, compared to Corporates with a ratio of 1.8:1.
Following a month-to-month trend, Oil & Gas firms again performed the best of the industry groups, with 3.1 improvements to every deterioration. Basic Materials and Technology were the next best performers, with ratios of 2.2:1 and 2.1:1 respectively. Several other industries showed similar levels of improvement, with Telecommunications finishing at the bottom of the group with the only negative ratio of 1:1.1 improvements to deteriorations – a small margin of difference.
Of the sectors, Canadian Oil & Gas firms were weighted heavily towards credit improvement, with a stand-out ratio of 36:1 (with fewer than 1% of the total pool deteriorating this month). US Oil & Gas showed another strong instance of net improvement at 4.3:1. Travel & Leisure firms are setting their pandemic-related woes firmly behind them as holidaymakers enthusiastically make summer travel plans, resulting in a ratio of 2.5 credit improvements to each deterioration this month. General Retailers are also enjoying improved fortunes with a ratio of 1.8:1.
In the update, you will find:
- Credit Consensus Distribution Changes: The net increase or decrease of entities in the given rating category since the last update.
- Credit Transition: Assesses the month-over-month observation-level net downgrades or upgrades, shown as a percentage of the total number of entities within each category.
- Ratio: Ratio of Improvements and Deteriorations in each category since last update, calculated as Improvements : Deteriorations.
- IG to HY Migration: The number of companies which have migrated from investment-grade to high-yield since the last update (known as Fallen Angels).
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.
