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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Credit Trends
Global Financing Conditions: Issuance Growth Could Slow In 2026 As Strains Persist
Global economic growth and bond issuance remained resilient in 2025 through bouts of heightened market risk, and we expect this to continue in 2026, though issuance growth could slow to 4.8%.
A healthy refinancing pipeline and accelerating M&A activity should support corporate (including financial services) issuance growth.
A multiyear AI and data center investment phase has started, which will likely continue to boost issuance by the high-tech sector, though the precise timing and extent of future debt issuance are far from certain.
As we enter the latter phase of this credit cycle, we maintain the possibility for issuance to decline in our downside scenario, where economic growth slows, geopolitical risks finally shake market confidence, or China's issuance growth slows amid efforts to reduce certain debt.
This Week In Credit
One Fallen Angel, Two Rising Stars
Upgrades increased and outnumbered downgrades for the first time in six weeks. There were seven upgrades of speculative-grade issuers, of which two were rising stars; U.S.- based oil and gas company Permian Resources Corporation and France-based SNF Group.
Downgrades primarily occurred to investment-grade entities, four of which were in the 'BBB' category. This included one fallen angel, French glass packaging manufacturer Verallia S.A., which brought the year-to-date total of fallen angels to five.
The sole default last week was a confidential entity in the forest products and building materials sector, bringing the year-to-date total to 23, broadly in line with the 2025 yearto-date count.
This Month In Credit
Outlook Bias Improves Amid Lingering Risks
Net outlook bias (the percentage of issuers with a positive outlook or on CreditWatch positive minus the percentage with negative outlook) increased in January for the fourth month in a row to -5.2%. But only three sectors--insurance, financial institutions, and transportation--had a positive net bias.
January saw its first fallen angel of the year, and the number of potential fallen angels was over double the number of potential rising stars. Utilities was the only sector with a new potential fallen angel and had the largest concentration of potential fallen angels (nine).
Monthly corporate defaults remained steady with nine in January, eight of which were in the U.S, while Europe saw no monthly defaults for the first time since December 2024. We expect the U.S. speculative-grade default rate to reach 3.75% by December 2026, and the European speculative-grade default rate to reach 3.25%.
U.S. BSL CLO exposure to obligors rated 'CCC' continued to rise, increasing 34 basis points (bps) to 5.8% (as of Jan. 26, 2026). European exposure also rose, but by a lesser extent, to 4.7% as of Jan. 31, 2026.
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