Credit Market Research
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.
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Global Financing Conditions
Tailwinds To Moderate, But Still Support Issuance Growth In 2026
Despite a year marked by trade volatility, causing a slump in bond issuance in the second quarter, market appetite for debt remains strong and will likely power issuance growth of 12% this year.
Some headwinds remain, and in our base case, we think current momentum will slow somewhat in 2026, to roughly 5% issuance growth.
If long-term rates fall in response to central bank cuts to policy rates, more growth-oriented forms of issuance could be added to already strong refinancing needs.
But we maintain the possibility for issuance growth to decline next year if the economy has slower growth, geopolitical risks shake market confidence, or China’s issuance growth slows after a strong 2025.
This Week In Credit
Negative Pressure Continues In Chemicals And Packaging
Rating actions declined last week, primarily because we saw fewer upgrades than the previous week. In the speculative-grade sector, we made six upgrades, including one rising star, Vallourec, bringing total rising stars to 25 in the year to date.
Downgrades included the first fallen angel since August: FMC Corp., a U.S.-based issuer in the chemicals, packaging, and environmental services sector. What's more, this sector has the second-largest number of potential fallen angels (five)--issuers rated 'BBB-' with a negative outlook or on CreditWatch negative. Year-to-date total fallen angels number 11, behind 17 at the same point last year.
There was one default last week to a U.S.-based issuer in the chemicals, packaging, and environmental services sector, FXI Holdings Inc. Since the beginning of November, this sector has accounted for five of the nine defaults.
This Month In Credit
Potential Fallen Angels Rise
Downgrades in October outnumbered upgrades for the first time since June, as investment-grade downgrades increased to their highest level since May. Potential fallen angels edged upward for the third month in a row to 39, reaching their highest total since February 2023.
On a positive note, net bias improved to its best level since May, primarily driven by a sharp (25 basis points) decrease in negative bias.
New additions to weakest links declined to eight last month, but half of the new entrants are in the high technology sector (four).
Structured finance: CLO downgrades increased to 27 last month from 15 in September, although there have been no defaults since August. Meanwhile, exposure to corporate obligors rated 'CCC' within CLOs continued to increase.
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