David Carruthers

The Russian intervention in Kazakhstan highlights the global importance of uranium supplies for military and power generation purposes, and with a number of countries considering expansion of nuclear energy programs, major uranium producers stand to benefit. This analysis details the credit quality trends for global firms involved in uranium production.

ESG credentials are more important than ever, and are instrumental in driving key business and investment decisions. For listed firms, it can determine their suitability as an investment and ultimately their funding costs. This paper looks at the link between ESG profiles and credit risk for Oil & Gas and Industrial firms, suggesting that for companies seeking credit, it pays to be green.

COP26 has made headlines, but the real debate is about the need for speed in translating pledges into action. Consensus credit data shows that nations with the most to lose from climate impact also have the least available resources to enact change – leaving the responsibility largely in the hands of developed economies with strong sovereign credit ratings.

Global food prices are at a 10-year high, pushed up by the pandemic. With climate change a growing issue, prices are likely to stay raised. Consensus credit data shows food producers have weathered COVID well, with many rated higher than the major credit rating agencies and continuing to improve.

With a potential UK interest rate hike on the cards, a growing number of central banks are seeing inflation as a key near-term risk to economic stability. With net credit upgrades currently in balance, and a growing number of countries imposing monetary tightening, there is a risk that the global net credit balance turns sharply negative.

A potential US Government shutdown is focusing attention on Sovereign credit risk, with a risk to US Treasury bond payments. A missed payment would be a major market event, but the broader issue is how Governments around the world handle the cost of COVID. The latest consensus data examines credit risk trends for Global Sovereign Governments, plus compares consensus vs CRA ratings for 12 major economies.

There are fears that investors in the broader high yield space are not being properly compensated for the risks. Though recent private equity investments have focused on firms that have weathered the pandemic with stable revenues and strong cash flows, which could boost the average credit quality of leveraged loan assets, the latest consensus credit data shows a more mixed picture.

Shipping container unit costs have skyrocketed and delivery times doubled in the past 18 months, with the pandemic causing port closures, trade flow disruptions and capacity reductions. Consensus credit data tracks the credit trend of Global Marine Transportation companies and suggests that the sector may be a leading indicator for broader corporate credit risk.