Our credit market research encompasses ratings performance indicators (including upgrades and downgrades, defaults, outlook changes, weakest links, rising stars, and fallen angels) alongside default and issuance forecasts and financing conditions coverage.
Our "Risky Credits" series focuses on corporate issuers rated 'CCC+' and lower. Because many defaults are of companies in these categories, ratings with negative outlooks or on CreditWatch negative are even more important to monitor.
NORTH AMERICA
Rating actions were broadly neutral last week, though negative outlooks or CreditWatch placements comfortably exceeded the positive ones. Walgreens Boots Alliance Inc., a U.S. issuer from the retail sector, became the 10th fallen angel this year.
There were three defaults last week, all in consumer-focused sectors and two were in consumer products.
Credit pricing was mixed, though CDS indices once again widened across the board last week.
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Credit trends remain positive, despite recent market volatility, with upgrades outnumbering downgrades for a sixth consecutive month--the longest monthly streak since 2021.
July’s upgrades were concentrated among financial institutions, almost exclusively from Europe (six out of seven). Financial institutions account for the second highest number of upgrades in the year to date (38), closely following media and entertainment (41).
Negative rating actions continue to fall, with net bias at its highest level since February 2023. Downgrade activity remains primarily concentrated at the 'B-' and 'CCC/C' levels.
Global corporate defaults are still elevated but, in our base-case forecast, we expect U.S. and European speculative-grade default rates to fall to 3.75% and 4.25%, respectively, by June 2025.
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