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.
We raised our global bond issuance growth forecast for the year to 17%, considering robust issuance through the third quarter and recent momentum being likely to continue through year-end.
We expect a more moderate issuance growth rate of 4% for 2025, since we expect high 2024 totals, slowing economic growth in 2025, and more modest interest rate declines than recent market expectations indicate.
That said, we see potential upside to our 2025 forecast from higher investment in AI, growth in mergers and acquisitions, or stimulative measures outside the U.S. and Europe.
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Downgrades outnumbered upgrades last week, with all five downgrades affecting speculative-grade issuers--three from the media and entertainment sector.
Among the downgrades, three issuers became risky credits (entered the 'CCC' rating category): Alvogen Pharma US, Inc. (Alvogen Lux Holdings S.a.r.l.) in healthcare, College Parent LP in media and entertainment, and JOANN Inc., a specialty retailer that subsequently defaulted on January 16 due to bankruptcy.
There were two other defaults, both involving consumer product companies undergoing distressed exchanges: Blue Ribbon, LLC (Blue Ribbon Holdings LLC) and Packers Holdings, LLC.
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Investment-grade downgrades rose to 11 in October, surpassing nine in all of the third quarter, driven by U.S. office REITs and actions related to the downgrade of the Israel sovereign.
The speculative-grade outlook is improving. Negative bias for issuers 'B-' and below has fallen in nine of the last 10 months and is down nearly six percentage points compared with this time last year. Weakest links continued to fall in October, although 71% were due to defaults or rating withdrawals.
U.S. defaults reached 11--their highest monthly count since May 2023. S&P Global Ratings Credit Research & Insights expects the U.S. and European trailing-12-month speculative-grade corporate default rates will decline slightly to 3.25% and 4.25%, respectively, by September 2025.
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