May. 03 2019 — (Editor's note: Rising stars are defined as issuers upgraded to investment grade ['BBB-' or higher] from speculative grade ['BB+' or lower] by S&P Global Ratings.)
- There are six rising stars so far in 2019 (all upgraded by one notch), significantly lower than the tally of 21 rising stars reported during the same period in 2018, when Russia and companies tied to the sovereign accounted for 33% of rising stars.
- As of April 8, 2019, 15 issuers globally were potential rising stars (issuers rated 'BB+' with positive outlooks or ratings on CreditWatch with positive implications), marking the lowest tally since July 2010. Because potential rising stars are leading indicators of future rising stars, the number of rising stars is expected to remain low this year.
- Of the rising stars since 2002, 71% were rated 'BB+' before they were upgraded to investment grade, while 90% were rated in the 'BB' rating category. The positive bias (the proportion of ratings with positive outlooks or on CreditWatch with positive implications) in the 'BB' rating category has tightened to 8.5% as of March 31, below its historical average of 13.6%. Additionally, the positive bias for 'BB+' rated issuers has dropped to 7.6%--less than half of its historical average over the past 24 years, indicating a lower probability of upgrades at this rating level. The positive bias for all issuers rated globally has fallen to 7.2%, below its historical average of 9.5% (see chart 4).
|The Rising Stars Tally Remains At Six|
|During This Period Last Year, There Were 21 Rising Stars|
|Date||Issuer||To||From||Sector/subsector||Country||Rated debt affected (mil. $)|
|3/27/19||BBB-||BB+||Forest products and building materials||Brazil||5,029|
|3/26/19||BBB-||BB+||Homebuilders/real estate companies||Guernsey||625|
|3/21/19||BBB-||BB+||Metals, mining, and steel||Canada||5,900|
|2/5/19||BBB-||BB+||Oil and gas||Russia||4,500|
|Data as of April 8, 2019. Source: S&P Global Fixed Income Research.|