August Credit Update: Consensus Upgrades and Downgrades Balanced

Credit Benchmark has published the latest monthly credit consensus data (from July 2018), with 25 contributor banks. The set of bank-sourced credit views (CBCs^*) now covers more than 21,000 separate legal entities.

The monthly upgrades and downgrades overview is now based on data adjusted for changes in contributor mix.

Monthly consensus upgrades and downgrades:

• 283 obligors improved their credit standing by at least one notch.
• 283 obligors deteriorated.
• 80 moved more than one notch.
• The frequency and the size of upgrades and downgrades has increased.

Last month showed improvements across 299 obligors and deterioration across 159, with 35 moving by more than one notch.

Industries:

• Upgrades dominate downgrades in three out of ten reported industries, three industries are biased towards downgrades and four are balanced.
• The industries showing an improvement in credit quality include:
  • Oil & Gas with 22 upgrades and five downgrades.
  • Basic Materials with 16 upgrades and nine downgrades.
  • Telecommunications with two upgrades and one downgrades.

• The industries showing deteriorations are:
  • Technology with six upgrades and 15 downgrades.
  • Consumer Goods with 13 upgrades and 21 downgrades.
  • Health Care with six upgrades and eight downgrades.

* CBC = Credit Benchmark Consensus; a 21-category classification which is explicitly linked to probability of default estimates sourced from major banks. A CBC of bbb+ is broadly comparable with BBB+ from S&P and Fitch or Baa1 from Moody’s.

Disclaimer: Credit Benchmark does not solicit any action based upon this report, which is not to be construed as an invitation to buy or sell any security or financial instrument. This report is not intended to provide personal investment advice and it does not take into account the investment objectives, financial situation and the particular needs of a particular person who may read this report.