Monthly Credit Outlook: May 2023
The March Monthly Credit Outlook looks at recent credit trends and highlights seen in the consensus dataset. This month, stubborn inflation risks steeper global credit deterioration.
Consensus Credit Ratings, CDS and CVAs
Consensus credit data can fill CDS market gaps for CVA calculations. This insight links real-world PDs to “Synthetic CDS” estimates for unrated, private counterparts.
Quarterly Credit Outlook Q1 2023
The latest whitepaper from Credit Benchmark illustrates global credit trends in the first quarter of 2023. The credit optimism of early 2023 has faded with the latest data suggesting a gradual but broad decline in global credit. US regional banks have shown extensive deterioration, though negative movement has paused for their larger counterparts. Global REITs, Mutual Funds, Hedge Funds, US Technology and Telecomms all showing net deterioration.
Data at a Glance: US and EU Banks
Recent bank failures and mergers have uncovered transatlantic tensions in the global banking sector. This data at a glance looks at US and EU Banks sectors. Average default risk for US Banks deteriorated for much of H2 2022 ahead of recent volatility. EU Banks default risk has been steadily improving.
Credit Portfolio Risk: Consensus Data Fills in the Blanks
Investors in credit portfolios make extensive use of credit agency ratings and market-driven risk models. But some segments are faced with less visibility and a lack of public ratings, while credit portfolio management models are only as good as the credit risk data available to them. This paper reviews a data-driven framework for portfolio risk analysis and discusses practical applications of consensus credit risk estimates.
AT1 Bonds: Investor Risk Means Stronger Banks
Bail-in bonds are a powerful extra prop for bank balance sheets in times of turmoil: AT1 bond issuers showed faster post-COVID credit recovery than most Global Systematically Important Banks, and the gap continues to widen.
After SVB: What’s the Next Shoe to Drop?
The sudden collapse of Silicon Valley Bank has raised questions as to what warning signs were missed. While this may have been a black swan event, bank credit warning signs have been flashing in consensus credit data for the past few months.
Monthly Credit Outlook: March 2023
The March Monthly Credit Outlook looks at recent credit trends and highlights seen in the consensus dataset. This month, stubborn inflation risks steeper global credit deterioration.
Global Corporates & Financials: In the Red
Global Corporates have returned to a negative credit balance, ending their 19-month positive run. Global Financials have now had four months without a positive credit balance. This negative shift is being driven by a number of Global Sectors.
Renewable Energy: Credit Tide Turning?
Renewable energy is at the centre of efforts to tackle climate change, but there have been setbacks to growth. 80%+ of energy demand is still met by fossil fuels, with fossil fuel companies reporting record profits as global energy prices spike. In the past two years, renewable credit risk has deteriorated and traditional energy has improved. However, there are some signs that the credit tide may be turning.
