Upgrades continued to outpace downgrades among speculative-grade corporate issuers in July, with 20 upgrades and 17 downgrades, reflecting issuers’ improving credit quality. The media, entertainment, and leisure sector experienced the most upgrades. On the other hand, the media, entertainment, and leisure and retail and restaurant sectors experienced the most downgrades, followed by health care. Despite the greater volume of positive rating actions, the number of downgrades into the ‘CCC’ rating category among U.S. and Canadian corporate issuers increased to six in July. The media, entertainment, and leisure sector led with three downgrades, including two issuers experiencing elevated refinancing risk and one that expected a liquidity shortfall in the next 12 months. A decline in operating performance amid macroeconomic and secular pressures is a recurring theme among these issuers. The retail sector followed closely with two downgrades.