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COMMENTS

Credit Trends: Downgrade Prospects Are Growing Across Global Credit Markets


Credit Trends: Downgrade Prospects Are Growing Across Global Credit Markets

Chart 1

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S&P Global Ratings downgraded 539 global corporate issuers (financial and nonfinancial) and upgraded 242 through the third quarter of 2019. Downgrades have outpaced upgrades for years due in part to increasing leverage, encouraged by stubbornly low and, in some cases, negative interest rates amid loose central bank monetary policy. In fact, leverage across most nonfinancial sectors is the highest in the past 15 years, which was one of the factors leading to lower ratings through the current credit cycle.

All but four sectors currently show median ratings at the lowest levels in two decades--a sign of vulnerability as current benign credit conditions wane. These four sectors, among them insurance and utilities, remain resilient despite structural changes in the consumer landscape, high geopolitical risks (both foreign and domestic), trade tensions, and subsequently high capital market volatility. Both the increase in leverage and deterioration in median ratings reflect a trend of more aggressive financial policies among existing rated issuers as much as new, more leveraged, lower-rated issuers to market over the years. For more information, see "A Weakening Economic Outlook And High Leverage Raise Global Corporate Downgrade Prospects," published July 30, 2019.

Chart 2

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While below historical averages, downgrade potential in the U.S., Europe, and emerging markets appears to have hit an inflection point in mid-2018, ticking up from record lows to present levels of 19%, 16%, and 18%, respectively, as measured by negative bias (the proportion of issuers with negative rating outlooks or ratings on CreditWatch with negative implications). Meanwhile, downgrade ratios (the proportion of downgrades among total rating actions) have risen above historical averages so far in 2019 in all regions but Europe.

We expect corporate issuers in the U.S., Europe, and emerging markets, especially in the auto, energy, and consumer/retail sectors, will see deteriorating credit quality in the next year, amid a presently neutral but weakening economic outlook and high nonfinancial corporate leverage. Note that S&P Global Ratings has taken negative rating actions on 10 auto companies since Sept. 30, 2019, reducing the sector's negative bias, though the sector continues to show relatively high downgrade prospects.

Table 1

Downgrades In 2019 Are Relatively High And Upgrades Are Limited
Global U.S. Europe Other developed Emerging markets
Downgrades (issuer count) 539 349 90 30 70
Debt volume (bil. US$) 1,345.8 847.2 323.7 96.0 78.7
Upgrades (issuer count) 242 141 57 15 29
Debt volume (bil. US$) 1,281.0 524.9 620.9 88.1 47.0
Total rating actions 781 490 147 45 99
Downgrade ratio 69% 71% 61% 67% 71%
Historical average* 62% 63% 65% 61% 56%
High, quarter 93%, 2009Q1 93%, 2009Q1 100%, 1995Q1 100%, 1997Q2 100%, 1995Q1
Low, quarter 34%, 1997Q3 30%, 1997Q3 27%, 2014Q2 0%, 1996Q3 0%, 1995Q2
Negative bias 17% 19% 16% 13% 18%
Historical average* 21% 21% 21% 19% 20%
High, quarter 37%, 2009Q2 39%, 2009Q1 41%, 2009Q2 33%, 2003Q2 47%, 1999Q1
Low, quarter 15%, 2011Q1 11%, 2013Q4 11%, 1997Q4 11%, 2005Q2 3%, 1996Q4
Positive bias 6% 5% 7% 6% 6%
Historical average* 9% 10% 9% 8% 11%
High, quarter 15%, 1996Q3 17%, 1996Q3 14%, 1998Q3 18%, 1995Q2 24%, 2000Q2
Low, quarter 5%, 2009Q1 6%, 2009Q1 3%, 2009Q1 2%, 2012Q2 3%, 2009Q2
Notes: Rating actions (upgrades and downgrades) through 2019Q3. Corporate issuers only. Rating changes exclude entities with no rated debt. See table 6 for details. *Historical average computed quarterly from 1995Q1-2019Q3. Data as of Sept. 30, 2019. Source: S&P Global Ratings Research.

The U.S. And Emerging Markets Have Weaker Rating Distributions

The U.S. and emerging markets have weaker rating distributions than other regions, with over half of issuers in both regions currently rated speculative grade ('BB+' or lower), compared with 43% for Europe and just 26% for the other developed markets (Australia, Canada, Japan, and New Zealand). This trend in the U.S. has accelerated in recent years with leveraged loans and other higher-yielding funding sources increasing, quenching investors' thirst for yield while accommodative monetary policies have suppressed the relative cost of capital for issuers. In emerging markets, the weaker ratings distribution reflects higher country risk and growing domestic and geopolitical risks in various economies throughout the world.

This distribution is particularly important because on average, roughly half of speculative-grade corporate issuers experience transitions (upgrades or downgrades) over a one-year time horizon, double the rate of their investment-grade (rated 'BBB-' or higher) counterparts. For more information, see "2018 Annual Global Corporate Default And Rating Transition Study," published April 9, 2019.

Chart 3

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Chart 4

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Volatility in ratings (vis-à-vis upgrades and downgrades) typically increases at lower rating categories, while higher ratings are generally more stable. With median ratings in the speculative-grade rating category, corporate issuers in the U.S., emerging markets, and Latin America all have higher ratings volatility, while Europe, other developed markets, and Asia have higher median ratings and more ratings stability (see table 2). Over the past five years, declines in creditworthiness have been most pronounced in Latin America and Asia.

Table 2

Median Ratings Tend To Drop As Bond Markets Develop
Global U.S. Europe Other developed Emerging markets Asia EEMEA Latin America
37 years ago A A- AAA AA- AA-
25 years ago (after early 1990s recession) A- BBB+ A+ A BBB BBB
15 years ago (after dot-com bubble) BBB BBB- A- BBB+ BB BBB- B+ BB
10 years ago (financial crisis) BBB BBB- A- BBB+ BB+ BBB BB+ BB
Five years ago (oil price shocks/Lava Jato) BBB- BB BBB BBB+ BB+ BBB+ BB- BB+
Today BB+ BB BBB BBB+ BB+ BBB BB BB
Data as of Sept. 30, 2019; data as of Dec. 31 for all previous years. Source: S&P Global Ratings.

The Auto, Energy, And Consumer Sectors Are Likely To Lead Downgrades In The Near Term

Downgrades in the consumer products and oil and gas sectors accounted for roughly a third of the downgrades in third-quarter 2019, and upgrades, while limited, were largely concentrated in the utility sector (with 20%).

S&P Global Ratings has taken 10 negative ratings actions in the auto industry since Sept. 30, and weakness is expected to continue as weaker auto sales, driven by competitive pressures in the aftermarket and firm-specific underperformance, likely compound the sector's current negative ratings bias. For more information, see our "Industry Top Trends 2019: Autos" and "U.S. Auto Sector Faces Bumpy Roads Ahead With Rising Recession Odds And Falling Demand," published Oct. 16, 2019.

Chart 5

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Chart 6

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Table 3

Median Ratings Have Deteriorated In Seven Out Of 13 Industries Over The Past Decade
10 years ago Three years ago Now
Aerospace/auto/capital goods/metals BB+ BB BB
Consumer/service BB- BB- B+
Energy and natural resources BB+ BB- BB-
Financial institutions A- BBB BBB
Forest and building Products/homebuilders BB- BB- BB-
Health care/chemicals BB- BB- B+
High tech/computers/office equipment BB- BB- B+
Insurance A A A
Leisure time/media B+ B+ B+
Real estate BBB BBB- BBB-
Telecommunications BB BB BB
Transportation BBB- BB+ BB+
Utilities BBB+ BBB+ BBB+
Data as of Sept. 30, 2019. Source: S&P Global Ratings Research.

Additional Exhibits

Chart 7

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Chart 8

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Chart 9

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Chart 10

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Chart 11

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Chart 12

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Table 4

Global Corporate Rating Actions By Region (Issuer Count)
--2019 Q3-- --2019 Q2-- --2019 Q1-- --2018 Q4--
Region No. up No. down DR (%) No. up No. down DR (%) No. up No. down DR (%) No. up No. down DR (%)
U.S. 43 119 73 58 117 67 40 114 74 46 89 66
Europe 14 39 74 27 25 48 16 26 62 27 40 60
Other developed 7 8 53 1 8 89 7 14 67 4 10 71
Emerging markets 12 36 75 13 15 54 4 19 83 13 22 63
Asia-Pacific 8 14 64 9 6 40 0 9 100 6 7 54
EEMEA 3 1 25 1 2 67 3 4 57 3 2 40
Latin America 1 21 95 3 7 70 1 6 86 4 13 76
Total 76 202 73 99 165 63 67 173 72 90 161 64
Note: Rating changes exclude entities with no rated debt. No. up--Number of upgrades. No. down--Number of downgrades. DR--Downgrade ratio. Other developed--Australia, Canada, Japan, and New Zealand. EEMEA--Eastern Europe, Middle East, and Africa. Data as of Sept. 30, 2019. Source: S&P Global Ratings Research.

Table 5

Global Corporate Rating Actions By Region (Amount Affected)
--2019 Q3 (bil. US$)-- --2019 Q2 (bil. US$)-- --2019 Q1 (bil. US$)-- --2018 Q4 (bil. US$)--
Region Vol. up Vol. down Vol. up Vol. down Vol. up Vol. down Vol. up Vol. down
U.S. 96 333 197 201 231 314 221 412
Europe 120 185 359 62 142 76 353 104
Other developed 28 21 10 6 51 69 3 12
Emerging markets 18 35 17 18 12 26 39 34
Asia-Pacific 11 5 15 3 0 10 5 24
EEMEA 6 1 0 0 7 2 14 0
Latin America 1 28 2 14 5 14 20 10
Total 262.42 573.01 582.54 287.61 436.06 485.86 616.14 561.18
Note: Rating changes exclude entities with no rated debt. Vol. up--Volume of debt affected by upgrades. Vol. down--Volume of debt affected by downgrades. Other developed--Australia, Canada, Japan, and New Zealand. EEMEA--Eastern Europe, Middle East, and Africa. Data as of Sept. 30, 2019. Source: S&P Global Ratings Research.

Table 6

Global Corporate Rating Actions: Third-Quarter 2019
Rating date Issuer Sector Country To From Rating action
7/1/2019

L3Harris Technologies Inc.

Aerospace and defense U.S. BBB BBB- Upgrade
8/13/2019 Salient CRGT Inc. Aerospace and defense U.S. B- B Downgrade
8/22/2019 Rolls-Royce PLC (Rolls-Royce Holdings PLC) Aerospace and defense U.K. BBB BBB+ Downgrade
9/16/2019

Guidehouse LLP

Aerospace and defense U.S. B- B Downgrade
7/31/2019

Aston Martin Holdings (UK) Ltd.

Automotive U.K. B- B Downgrade
8/7/2019 Harman International Industries Inc. (Samsung Electronics Co. Ltd.) Automotive U.S. A BBB+ Upgrade
9/6/2019

Bright Bidco B.V.

Automotive Netherlands CCC+ B Downgrade
9/18/2019 APC Automotive Technologies Intermediate Holdings LLC Automotive U.S. CCC CCC+ Downgrade
9/25/2019

Aston Martin Holdings (UK) Ltd.

Automotive U.K. CCC+ B- Downgrade
9/26/2019

Autoliv Inc.

Automotive U.S. BBB+ A- Downgrade
9/27/2019

Grupo Antolin Irausa SA

Automotive Spain B B+ Downgrade
8/1/2019

Nomura Holdings Inc.

Bank Japan BBB+ A- Downgrade
8/20/2019

Banco De Galicia Y Buenos Aires S.A.U.

Bank Argentina B- B Downgrade
9/16/2019

NRW.BANK

Bank Germany AA AA- Upgrade
9/25/2019 mBank S.A. (Commerzbank AG) Bank Poland BBB BBB+ Downgrade
7/15/2019 Liquidnet Holdings Inc. Brokerage U.S. BB- B+ Upgrade
8/1/2019

Daiwa Securities Group Inc.

Brokerage Japan BBB+ A- Downgrade
8/23/2019

LPL Holdings Inc.

Brokerage U.S. BB+ BB Upgrade
7/26/2019

Jain Irrigation Systems Ltd.

Capital goods India CCC B- Downgrade
7/29/2019

Parker-Hannifin Corp.

Capital goods U.S. A- A Downgrade
8/6/2019

McDermott International Inc.

Capital goods Panama B- B Downgrade
8/7/2019

Titan International Inc.

Capital goods U.S. CCC+ B- Downgrade
8/8/2019

Zhenjiang Transportation Industry Group Co. Ltd.

Capital goods China B+ BB- Downgrade
8/9/2019 Doosan Bobcat Inc. (Doosan Infracore Co. Ltd.) Capital goods Korea, Republic of BB BB- Upgrade
8/12/2019

Fluor Corp.

Capital goods U.S. BBB BBB+ Downgrade
8/13/2019

Jason Inc.

Capital goods U.S. CCC+ B Downgrade
8/19/2019

thyssenkrupp AG

Capital goods Germany BB- BB Downgrade
8/19/2019

SNC-Lavalin Group Inc.

Capital goods Canada BB+ BBB- Downgrade
8/22/2019

Tianjin Binhai New Area Construction & Investment Group Co. Ltd.

Capital goods China BBB- BBB Downgrade
8/23/2019

Briggs & Stratton Corp.

Capital goods U.S. B BB- Downgrade
9/2/2019

CLISA-Compania Latinoamericana de Infraestructura & Servicios S.A.

Capital goods Argentina CCC B- Downgrade
9/6/2019

Optimas OE Solutions Holding LLC

Capital goods U.S. CCC+ B- Downgrade
9/12/2019

Cleaver-Brooks Inc.

Capital goods U.S. B- B Downgrade
9/13/2019

CPM Holdings Inc.

Capital goods U.S. B- B Downgrade
9/16/2019

Form Technologies LLC

Capital goods U.S. B- B Downgrade
9/20/2019

McDermott International Inc.

Capital goods Panama CCC B- Downgrade
9/26/2019 PLH Group Inc. Capital goods U.S. B B+ Downgrade
7/2/2019 Grupo IDESA S.A. de C.V. Chemicals, packaging, and environmental services Mexico CCC CCC+ Downgrade
7/15/2019 TPC Group Inc. (TPC Group LLC) Chemicals, packaging, and environmental services U.S. B B- Upgrade
7/18/2019 Global Houghton Ltd. Chemicals, packaging, and environmental services Cayman Islands B- B Downgrade
8/1/2019 Ball Metalpack Finco LLC Chemicals, packaging, and environmental services U.S. B- B Downgrade
8/26/2019

PMHC II Inc.

Chemicals, packaging, and environmental services U.S. CCC+ B- Downgrade
9/4/2019

Strategic Materials Holding Corp.

Chemicals, packaging, and environmental services U.S. CCC+ B Downgrade
9/5/2019

Shandong Yuhuang Chemical Co. Ltd.

Chemicals, packaging, and environmental services China CCC+ B- Downgrade
9/5/2019

Anchor Glass Container Corp.

Chemicals, packaging, and environmental services U.S. CCC+ B- Downgrade
9/6/2019

Ashland Global Holdings Inc.

Chemicals, packaging, and environmental services U.S. BB+ BB Upgrade
9/19/2019 Shanghai Huayi (Group) Company Chemicals, packaging, and environmental services China BBB BBB- Upgrade
9/23/2019

Stericycle Inc.

Chemicals, packaging, and environmental services U.S. BB BBB- Downgrade
9/26/2019

Faerch Midco ApS

Chemicals, packaging, and environmental services Denmark B- B Downgrade
9/27/2019 K+S Aktiengesellschaft Chemicals, packaging, and environmental services Germany BB- BB Downgrade
9/27/2019 Flint HoldCo S.a.r.l. Chemicals, packaging, and environmental services Luxembourg CCC+ B- Downgrade
7/11/2019

Coty Inc.

Consumer products U.S. B+ BB- Downgrade
7/16/2019 PT Delta Merlin Dunia Textile Consumer products Indonesia CCC- BB- Downgrade
7/23/2019

Novartex

Consumer products France CC CCC Downgrade
7/26/2019

Yihua Enterprise (Group) Co. Ltd.

Consumer products China CCC B- Downgrade
8/9/2019

Lamb Weston Holdings Inc.

Consumer products U.S. BB+ BB Upgrade
8/15/2019 Tupperware Brands Corporation Consumer products U.S. BB+ BBB- Downgrade
8/22/2019 Rodan & Fields LLC Consumer products U.S. B B+ Downgrade
8/22/2019 PT Delta Merlin Dunia Textile Consumer products Indonesia CC CCC- Downgrade
8/23/2019

Lanai Holdings III Inc.

Consumer products U.S. CCC CCC+ Downgrade
8/26/2019 Badger Finance LLC (Badger Intermediate Holdings LLC) Consumer products U.S. CCC B- Downgrade
8/27/2019

ASP MCS Acquisition Corp.

Consumer products U.S. CCC CCC+ Downgrade
8/29/2019 VIP Cinema Holdings Inc. Consumer products U.S. CCC- CCC Downgrade
9/5/2019

KNB Holdings Corp.

Consumer products U.S. B- B Downgrade
9/6/2019

Herbalife Nutrition Ltd.

Consumer products Cayman Islands BB- B+ Upgrade
9/6/2019

Edgewell Personal Care Co.

Consumer products U.S. BB- BB Downgrade
9/10/2019

B&G Foods Inc.

Consumer products U.S. B+ BB- Downgrade
9/12/2019 Spin Holdco Inc. Consumer products U.S. B- B Downgrade
9/13/2019 PT Delta Merlin Dunia Textile Consumer products Indonesia D CC Downgrade
9/13/2019 Deoleo S.A. Consumer products Spain CCC- CCC+ Downgrade
9/17/2019 Renfro Corporation Consumer products U.S. CCC+ B Downgrade
9/17/2019 AI Aqua Sàrl Consumer products Luxembourg B- B Downgrade
9/18/2019

Anastasia Holdings LLC

Consumer products U.S. B- B Downgrade
9/18/2019 J. Crew Group Inc. (Chinos Intermediate Holdings A Inc.) Consumer products U.S. CCC- CCC Downgrade
9/19/2019

Vista Outdoor Inc.

Consumer products U.S. B B+ Downgrade
9/19/2019 Shandong Ruyi Technology Group Co. Ltd. (Beijing Ruyi Fashion Investment Holding Co. Ltd.) Consumer products China B- B Downgrade
9/20/2019 AI Aqua Sàrl Consumer products Luxembourg B- B Downgrade
9/23/2019

Varsity Brands Holding Co Inc.

Consumer products U.S. B- B Downgrade
9/24/2019 Chobani Global Holdings LLC Consumer products U.S. B- B Downgrade
9/25/2019

Tailored Brands Inc.

Consumer products U.S. B B+ Downgrade
9/27/2019

Keter Group B.V.

Consumer products Netherlands CCC+ B- Downgrade
9/30/2019 Deoleo S.A. Consumer products Spain CC CCC- Downgrade
9/16/2019

Erste Abwicklungsanstalt

Financial institutions Germany AA AA- Upgrade
7/5/2019

Credivalores - Crediservicios SAS

Financial institutions Colombia B B+ Downgrade
7/11/2019

Stearns Holdings LLC

Financial institutions U.S. D CCC+ Downgrade
8/15/2019 Nuveen Finance LLC (Teachers Insurance & Annuity Association of America) Financial institutions U.S. A A- Upgrade
8/29/2019

Sistema (PJSFC)

Financial institutions Russia BB- B+ Upgrade
9/6/2019

Euronet Worldwide Inc.

Financial institutions U.S. BBB BBB- Upgrade
7/26/2019 Omnimax International Inc. Forest products and building materials U.S. CCC+ B- Downgrade
8/14/2019

Lecta S.A.

Forest products and building materials Luxembourg CCC B- Downgrade
8/21/2019

Rayonier Advanced Materials Inc.

Forest products and building materials U.S. B- BB- Downgrade
8/30/2019

Beacon Roofing Supply Inc.

Forest products and building materials U.S. B+ BB- Downgrade
9/4/2019 Omnimax International Inc. Forest products and building materials U.S. CCC CCC+ Downgrade
9/10/2019

Lecta S.A.

Forest products and building materials Luxembourg CCC- CCC Downgrade
9/16/2019

Pro.Gest SpA

Forest products and building materials Italy BB- BB Downgrade
9/30/2019

Lecta S.A.

Forest products and building materials Luxembourg CC CCC- Downgrade
7/11/2019 Aegis Toxicology Sciences Corporation (Aegis Acquistion Inc.) Health care U.S. B- B Downgrade
7/12/2019 Amneal Pharmaceuticals LLC (Amneal Pharmaceuticals Inc.) Health care U.S. B BB- Downgrade
7/19/2019

Alcami Corporation

Health care U.S. CCC+ B- Downgrade
7/26/2019 Nomad JV L.P. Health care U.S. B B- Upgrade
7/29/2019

Pfizer Inc.

Health care U.S. AA- AA Downgrade
8/5/2019

Aenova Holding GmbH

Health care Germany CCC+ B- Downgrade
8/7/2019

Option Care Health INC.

Health care U.S. B- CCC+ Upgrade
8/13/2019 Diplomat Pharmacy Inc. Health care U.S. B- B Downgrade
8/28/2019 Alvogen Pharma US Inc. (Alvogen Lux Holdings S.a.r.l.) Health care U.S. B- B Downgrade
9/10/2019 American Renal Associates Holdings Inc. Health care U.S. B- B Downgrade
9/11/2019

Mallinckrodt plc

Health care Ireland CCC B+ Downgrade
9/12/2019

Zelis Healthcare Corp.

Health care U.S. B B+ Downgrade
9/12/2019

Medical Depot Holdings Inc.

Health care U.S. CCC B- Downgrade
9/17/2019

Edwards Lifesciences Corp.

Health care U.S. BBB BBB- Upgrade
9/23/2019

Medical Depot Holdings Inc.

Health care U.S. CC CCC Downgrade
9/24/2019

LifeScan Global Corporation

Health care U.S. B B+ Downgrade
7/2/2019

Oracle Corp.

High technology U.S. A+ AA- Downgrade
7/16/2019

4L Technologies Inc.

High technology U.S. CCC B Downgrade
7/24/2019 SciQuest Inc. (S2P Acquisition Borrower Inc.) High technology U.S. B- B Downgrade
8/5/2019

Zebra Technologies Corp.

High technology U.S. BB+ BB Upgrade
8/7/2019

Keysight Technologies Inc.

High technology U.S. BBB BBB- Upgrade
8/13/2019

Casa Systems Inc.

High technology U.S. B B+ Downgrade
8/15/2019 CommScope Holding Co. Inc. High technology U.S. B B+ Downgrade
8/20/2019 Go Daddy Operating Company LLC High technology U.S. BB BB- Upgrade
8/23/2019 Riverbed Parent Inc. High technology U.S. CCC+ B- Downgrade
8/28/2019 Optiv Inc. High technology U.S. CCC+ B- Downgrade
9/4/2019

Sony Corp.

High technology Japan A- BBB+ Upgrade
9/16/2019

Ciena Corp.

High technology U.S. BB+ BB Upgrade
9/17/2019

Navico Group AS

High technology Norway CCC+ B Downgrade
9/18/2019 Global Payments Inc High technology U.S. BBB- BB+ Upgrade
9/27/2019

Almaviva S.p.A.

High technology Italy B B+ Downgrade
7/18/2019

PT Lippo Karawaci Tbk.

Homebuilders/real estate companies Indonesia B- CCC+ Upgrade
7/23/2019

Brookfield Residential Properties Inc.

Homebuilders/real estate companies Canada B+ B Upgrade
8/9/2019

Ronshine China Holdings Ltd.

Homebuilders/real estate companies Cayman Islands B+ B Upgrade
8/20/2019 IRSA Inversiones y Representaciones S.A. (Cresud S.A.C.I.F. y A.) Homebuilders/real estate companies Argentina B- B Downgrade
8/28/2019

Damac Real Estate Development Ltd.

Homebuilders/real estate companies U.A.E. B+ BB- Downgrade
8/28/2019

Logan Property Holdings Co. Ltd.

Homebuilders/real estate companies Cayman Islands BB BB- Upgrade
8/29/2019

Starhill Global Real Estate Investment Trust

Homebuilders/real estate companies Singapore BBB BBB+ Downgrade
9/3/2019 Blackstone Property Partners Europe Holdings S.a r.l. (Blackstone Property Partners Europe LP) Homebuilders/real estate companies Luxembourg BBB BBB- Upgrade
9/5/2019

CBL & Associates Properties Inc.

Homebuilders/real estate companies U.S. B+ BB- Downgrade
9/5/2019

Longfor Group Holdings Ltd.

Homebuilders/real estate companies Cayman Islands BBB BBB- Upgrade
9/9/2019

Pinewood Group Ltd

Homebuilders/real estate companies U.K. BB- B+ Upgrade
9/12/2019

Xinyuan Real Estate Co. Ltd.

Homebuilders/real estate companies Cayman Islands B- B Downgrade
7/18/2019

Sampo PLC

Insurance Finland A A- Upgrade
7/19/2019 Ohio National Financial Services Inc. (Ohio National Mutual Holdings Inc.) Insurance U.S. BBB- BBB Downgrade
7/22/2019

iA Financial Corporation Inc.

Insurance Canada A A- Upgrade
7/22/2019

Aviva PLC

Insurance U.K. A A- Upgrade
7/25/2019 Genworth Financial Mortgage Insurance Pty Ltd. (Genworth Financial Inc.) Insurance Australia A A+ Downgrade
8/27/2019

AMP Ltd.

Insurance Australia BBB+ A- Downgrade
7/9/2019

SRAM LLC

Media and entertainment U.S. BB- B+ Upgrade
7/12/2019 Thomas Cook Group PLC Media and entertainment U.K. CC CCC+ Downgrade
7/22/2019

EmployBridge Holding Co

Media and entertainment U.S. B B- Upgrade
7/26/2019

LSC Communications Inc.

Media and entertainment U.S. CCC+ B Downgrade
8/1/2019

Clear Channel Outdoor Holdings Inc.

Media and entertainment U.S. B- CCC+ Upgrade
8/5/2019

Deluxe Entertainment Services Group Inc.

Media and entertainment U.S. CCC- B- Downgrade
8/12/2019

CWGS Enterprises LLC

Media and entertainment U.S. B B+ Downgrade
8/15/2019

Exela Technologies Inc.

Media and entertainment U.S. CCC+ B- Downgrade
8/26/2019

Harland Clarke Holdings Corp.

Media and entertainment U.S. CCC+ B- Downgrade
8/28/2019 China Travel Service (Holdings) Hong Kong Limited (China National Travel Service Group Corporation Limited) Media and entertainment Hong Kong A- BBB+ Upgrade
8/29/2019 Imagine Group LLC (The) Media and entertainment U.S. CCC+ B- Downgrade
9/3/2019 Conduent Inc. Media and entertainment U.S. BB BB+ Downgrade
9/5/2019

Tribe Buyer LLC

Media and entertainment U.S. B- B Downgrade
9/9/2019 Shutterfly Inc. Media and entertainment U.S. B BB- Downgrade
9/10/2019

Host Hotels & Resorts Inc.

Media and entertainment U.S. BBB- BB+ Upgrade
9/10/2019

Deluxe Entertainment Services Group Inc.

Media and entertainment U.S. CC CCC- Downgrade
9/12/2019 Merrill Corporation Media and entertainment U.S. B B+ Downgrade
9/20/2019 Deliver Buyer Inc. Media and entertainment U.S. B- B Downgrade
9/20/2019 E.W. Scripps Company (The) Media and entertainment U.S. B B+ Downgrade
9/23/2019 Cirsa Enterprises S.L.U. (LHMC Finco 2 S.a.r.l.) Media and entertainment Spain B B+ Downgrade
9/24/2019 Thomas Cook Group PLC Media and entertainment U.K. D CC Downgrade
9/26/2019

WeWork Companies LLC

Media and entertainment U.S. B- B Downgrade
9/27/2019

Safari Beteiligungs Gmbh

Media and entertainment Germany B- B Downgrade
7/5/2019

Geo Energy Resources Ltd.

Metals, mining, and steel Singapore B- B Downgrade
8/1/2019 Companhia Siderurgica Nacional (CSN) Metals, mining, and steel Brazil B B- Upgrade
8/28/2019

Murray Energy Corp.

Metals, mining, and steel U.S. CCC CCC+ Downgrade
8/30/2019

Qinghai Provincial Investment Group Co. Ltd.

Metals, mining, and steel China CCC- CCC+ Downgrade
9/5/2019

Zhongrong Xinda Group Co. Ltd.

Metals, mining, and steel China CCC+ B Downgrade
9/6/2019

First Quantum Minerals Ltd

Metals, mining, and steel Canada B- B Downgrade
9/16/2019

Press Metal Aluminium Holdings Bhd.

Metals, mining, and steel Malaysia B+ BB- Downgrade
9/17/2019

Metinvest B.V.

Metals, mining, and steel Netherlands B B- Upgrade
7/3/2019

Nostrum Oil and Gas PLC

Oil and gas exploration and production U.K. CCC+ B- Downgrade
7/3/2019 PES Holdings LLC Oil and gas exploration and production U.S. D B- Downgrade
7/15/2019

Murphy Oil Corp.

Oil and gas exploration and production U.S. BB+ BBB- Downgrade
7/17/2019 Sanchez Energy Corp. Oil and gas exploration and production U.S. CC CCC Downgrade
7/18/2019

American Energy Permian Holdings LLC

Oil and gas exploration and production U.S. D CC Downgrade
7/24/2019 Bruin E&P Partners LLC Oil and gas exploration and production U.S. B- B Downgrade
7/30/2019

Vine Oil & Gas LP

Oil and gas exploration and production U.S. CCC+ B Downgrade
8/1/2019

CGG

Oil and gas exploration and production France B B- Upgrade
8/7/2019 Halcon Resources Corporation Oil and gas exploration and production U.S. D CC Downgrade
8/8/2019

Occidental Petroleum Corp.

Oil and gas exploration and production U.S. BBB A Downgrade
8/8/2019

Whiting Petroleum Corp.

Oil and gas exploration and production U.S. BB- BB Downgrade
8/12/2019

Perpetual Energy Inc.

Oil and gas exploration and production Canada CCC CCC- Upgrade
8/12/2019 Sanchez Energy Corp. Oil and gas exploration and production U.S. D CC Downgrade
8/12/2019

Superior Energy Services Inc.

Oil and gas exploration and production U.S. B- B+ Downgrade
8/16/2019

EP Energy LLC

Oil and gas exploration and production U.S. CC CCC- Downgrade
8/20/2019 YPF S.A Oil and gas exploration and production Argentina B- B Downgrade
8/20/2019

Gulfport Energy Corp.

Oil and gas exploration and production U.S. B+ BB- Downgrade
8/22/2019

Unit Corp.

Oil and gas exploration and production U.S. B- B+ Downgrade
8/23/2019 Antero Resources Corporation Oil and gas exploration and production U.S. BB BB+ Downgrade
8/23/2019 KLX Energy Services Holdings Inc. Oil and gas exploration and production U.S. B- B Downgrade
8/26/2019

Range Resources Corp.

Oil and gas exploration and production U.S. BB BB+ Downgrade
8/28/2019 Forum Energy Technologies Inc. Oil and gas exploration and production U.S. B- B Downgrade
8/29/2019 Nine Energy Service Inc. Oil and gas exploration and production U.S. B- B Downgrade
8/29/2019 China Oilfield Services Limited (China National Offshore Oil Corp.) Oil and gas exploration and production China BBB+ BBB Upgrade
9/13/2019

Chesapeake Energy Corp.

Oil and gas exploration and production U.S. SD B+ Downgrade
9/17/2019

EP Energy LLC

Oil and gas exploration and production U.S. D CC Downgrade
9/25/2019

Noble Corporation PLC

Oil and gas exploration and production U.K. CCC+ B Downgrade
9/25/2019

Ultra Petroleum Corp

Oil and gas exploration and production U.S. CCC- CCC+ Downgrade
9/25/2019

Diamond Offshore Drilling Inc.

Oil and gas exploration and production U.S. CCC+ B Downgrade
9/25/2019

Transocean Ltd.

Oil and gas exploration and production Switzerland CCC+ B- Downgrade
9/25/2019

Valaris plc

Oil and gas exploration and production U.K. CCC+ B- Downgrade
7/12/2019 El Corte Ingles S.A. Retail/restaurants Spain BB+ BB Upgrade
7/17/2019 California Pizza Kitchen Inc. Retail/restaurants U.S. CCC+ B- Downgrade
7/17/2019

Rent-A-Center Inc.

Retail/restaurants U.S. BB- B Upgrade
7/19/2019 Steak n Shake Inc. (Biglari Holdings Inc.) Retail/restaurants U.S. CCC- CCC Downgrade
7/23/2019

99 cents only stores LLC

Retail/restaurants U.S. SD CC Downgrade
8/2/2019

KeHE Distributors Holdings LLC

Retail/restaurants U.S. B B- Upgrade
8/20/2019

JD.com Inc.

Retail/restaurants Cayman Islands BBB BBB- Upgrade
8/28/2019 Jardine Strategic Holdings Ltd. (Jardine Matheson Holdings Ltd.) Retail/restaurants Bermuda A+ A Upgrade
8/28/2019 Penney (J.C.) Co. Inc. Retail/restaurants U.S. CCC CCC+ Downgrade
9/3/2019 Burger BossCo Intermediate Inc. Retail/restaurants U.S. SD CCC+ Downgrade
9/6/2019

Restaurant Brands International Inc.

Retail/restaurants Canada BB BB- Upgrade
9/17/2019

Sotheby's

Retail/restaurants U.S. B+ BB- Downgrade
9/19/2019

Jo-Ann Stores Holdings Inc

Retail/restaurants U.S. B- B Downgrade
9/20/2019

NPC International Inc.

Retail/restaurants U.S. CCC- CCC+ Downgrade
7/3/2019

IPC Corp.

Telecommunications U.S. CC CCC+ Downgrade
7/4/2019

Speedcast International Limited

Telecommunications Australia B+ BB- Downgrade
7/9/2019

PT Profesional Telekomunikasi Indonesia

Telecommunications Indonesia BBB BBB- Upgrade
7/9/2019

PT Tower Bersama Infrastructure Tbk.

Telecommunications Indonesia BB BB- Upgrade
7/12/2019

Bouygues S.A.

Telecommunications France A- BBB+ Upgrade
7/26/2019

Interxion Holding N.V.

Telecommunications Netherlands BB BB- Upgrade
7/30/2019

Quebecor Media Inc.

Telecommunications Canada BB+ BB Upgrade
8/1/2019

Vodafone Group PLC

Telecommunications U.K. BBB BBB+ Downgrade
8/2/2019 Unitymedia GmbH (Liberty Global PLC) Telecommunications Germany BBB BB- Upgrade
8/12/2019 Telekom Austria AG (America Movil S.A.B. de C.V.) Telecommunications Austria BBB+ BBB Upgrade
8/15/2019

Alorica Inc.

Telecommunications U.S. B B+ Downgrade
8/16/2019 Internap Corporation Telecommunications U.S. CCC+ B- Downgrade
8/20/2019

Telecom Argentina S.A.

Telecommunications Argentina B B+ Downgrade
8/21/2019

Maxcom Telecomunicaciones S.A.B. de C.V.

Telecommunications Mexico D CC Downgrade
8/30/2019

Telecom Argentina S.A.

Telecommunications Argentina B- B Downgrade
9/2/2019

Speedcast International Limited

Telecommunications Australia B B+ Downgrade
9/9/2019

DNA PLC

Telecommunications Finland BBB+ BBB Upgrade
9/9/2019

Telenor ASA

Telecommunications Norway A- A Downgrade
9/27/2019

Premiere Global Services Inc.

Telecommunications U.S. SD CCC- Downgrade
7/2/2019 Travelport Worldwide Ltd. Transportation Bermuda B B+ Downgrade
7/3/2019

Flexi-Van Leasing Inc.

Transportation U.S. CC B- Downgrade
7/23/2019

Avianca Holdings S.A.

Transportation Panama SD CCC+ Downgrade
8/9/2019

United Parcel Service Inc.

Transportation U.S. A A+ Downgrade
8/12/2019

Flexi-Van Leasing Inc.

Transportation U.S. CCC CC Upgrade
8/13/2019

Vista Global Holding Ltd.

Transportation U.A.E. B+ B Upgrade
8/27/2019

PostNL N.V.

Transportation Netherlands BBB BBB+ Downgrade
9/11/2019 Al Mistral Holdco Ltd. Transportation U.K. B- B Downgrade
7/3/2019 Southern Water (Greensands) Financing plc (Greensands Holdings Ltd.) Utilities U.K. B B+ Downgrade
7/23/2019 TC PipeLines, LP (TC Energy Corporation) Utilities U.S. BBB BBB- Upgrade
7/25/2019

Eversource Energy

Utilities U.S. A- A+ Downgrade
7/30/2019 Andeavor Logistics LP (Marathon Petroleum Corporation) Utilities U.S. BBB BBB- Upgrade
8/1/2019 Glass Mountain Pipeline LLC Utilities U.S. B B- Upgrade
8/2/2019

Ukrainian Railways JSC

Utilities Ukraine B- CCC+ Upgrade
8/7/2019 Kansas City Power & Light Co. (Evergy Inc.) Utilities U.S. A A- Upgrade
8/14/2019 Entergy Arkansas LLC (Entergy Corp) Utilities U.S. A- BBB+ Upgrade
8/14/2019 Entergy Mississippi LLC (Entergy Corp) Utilities U.S. A- BBB+ Upgrade
8/14/2019 Entergy Louisiana LLC (Entergy Corp) Utilities U.S. A- BBB+ Upgrade
8/14/2019

Guacolda Energia S.A

Utilities Chile BB- BB Downgrade
8/20/2019

Empresa Distribuidora Y Comercializadora Norte S.A.

Utilities Argentina B- B Downgrade
8/20/2019

Aeropuertos Argentina 2000 S.A.

Utilities Argentina B B+ Downgrade
8/20/2019

Pampa Energia S.A.

Utilities Argentina B- B Downgrade
8/20/2019

Compania de Transporte de Energia Electrica en Alta Tension TRANSENER S.A.

Utilities Argentina B- B Downgrade
8/20/2019 AES Argentina Generacion S.A (AES Corp. (The)) Utilities Argentina B- B Downgrade
8/26/2019 Antero Midstream Partners LP (Antero Resources Corporation) Utilities U.S. BB BB+ Downgrade
8/27/2019 DTE Gas Co. (DTE Energy Co.) Utilities U.S. A- BBB+ Upgrade
8/27/2019

Port of Tauranga Ltd.

Utilities New Zealand A- BBB+ Upgrade
8/27/2019 DTE Electric Co. (DTE Energy Co.) Utilities U.S. A- BBB+ Upgrade
8/27/2019

Eesti Energia AS

Utilities Estonia BBB- BBB Downgrade
8/29/2019

Korea Gas Corp.

Utilities Korea, Republic of AA AA- Upgrade
8/30/2019

Aeropuertos Argentina 2000 S.A.

Utilities Argentina B- B Downgrade
8/30/2019 Transportadora de Gas del Sur S.A. (TGS) (Compania De Inversiones de Energia S.A.) Utilities Argentina B- B Downgrade
8/30/2019

CAPEX S.A.

Utilities Argentina B- B Downgrade
9/5/2019 SUEZ Water Resources LLC (Suez Environment Co.) Utilities U.S. A A- Upgrade
9/12/2019 Nicor Gas Co. (Southern Co.) Utilities U.S. A A- Upgrade
9/12/2019 Alabama Power Co. (Southern Co.) Utilities U.S. A A- Upgrade
9/17/2019 Otter Tail Power Company (Otter Tail Corporation) Utilities U.S. BBB+ BBB Upgrade
9/20/2019

Atlantia SpA

Utilities Italy BBB- BBB Downgrade
Notes: Rating changes exclude entities with no rated debt. Actions on subsidiaries are listed in parentheses. Data as of Sept. 30, 2019. Source: S&P Global Ratings Research.

Table 7

S&P Global Ratings Research Trends (2016Q1-2019Q3)
Defaulted issuers Weakest links Fallen angels Rising stars Potential downgrades Potential upgrades
Global
2016Q1 37 252 15 9 693 248
2016Q2 57 262 10 9 717 262
2016Q3 37 261 10 7 688 281
2016Q4 30 253 8 7 675 269
2017Q1 24 253 5 3 650 307
2017Q2 33 223 7 15 624 299
2017Q3 15 221 4 13 577 324
2017Q4 24 202 10 5 539 358
2018Q1 26 186 5 18 518 354
2018Q2 22 198 9 9 522 362
2018Q3 13 204 5 8 552 367
2018Q4 21 205 7 6 551 329
2019Q1 29 213 4 5 553 305
2019Q2 34 233 5 3 572 281
2019Q3 20 270 4 3 617 256
U.S.
2016Q1 30 162 9 6 329 141
2016Q2 32 184 4 4 352 150
2016Q3 25 176 5 5 333 156
2016Q4 18 175 4 4 330 143
2017Q1 17 171 5 0 301 157
2017Q2 23 156 0 9 312 151
2017Q3 9 158 2 5 305 166
2017Q4 15 150 6 3 307 178
2018Q1 18 141 1 5 295 181
2018Q2 14 148 5 4 308 188
2018Q3 3 149 4 5 316 195
2018Q4 12 147 6 2 314 179
2019Q1 21 153 4 1 318 163
2019Q2 23 167 2 2 326 151
2019Q3 13 179 3 2 331 138
Notes: Figures exclude sovereign data. Defaulted issuers count includes confidentially rated entities. Data as of Sept. 30, 2019. Source: S&P Global Ratings Research.

Appendix

For the purpose of this report, we define the regions below as follows:

U.S.:  U.S., Bermuda, Cayman Islands

Europe:  Andorra, Austria, Belgium, Bulgaria, Cape Verde, Channel Islands, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Gibraltar, Greece, Hungary, Iceland, Ireland, Isle of Man, Italy, Jersey, Liechtenstein, Lithuania, Luxembourg, Malta, Monaco, Netherlands, Norway, Portugal, Romania, Saint Helena, Slovenia, Spain, Sweden, Switzerland, U.K.

Other developed:  Australia, Canada, Japan, New Zealand

Emerging markets consist of:

Asia:  Bangladesh, China, Cook Islands, Fiji, Hong Kong, India, Indonesia, South Korea, Malaysia, Marshall Islands, Mongolia, Pakistan, Papua New Guinea, Philippines, Singapore, Sri Lanka, Taiwan, Thailand, Vietnam

Eastern Europe, Middle East, and Africa (EEMEA):  Bahrain, Botswana, Burkina Faso, Cameroon, Congo-Brazzaville, Croatia, Egypt, Georgia, Ghana, Iraq, Israel, Jordan, Kazakhstan, Kenya, Kuwait, Latvia, Lebanon, Liberia, Macedonia, Mauritius, Montenegro, Morocco, Mozambique, Nigeria, Oman, Qatar, Russia, Saudi Arabia, Senegal, Serbia, South Africa, Tunisia, Turkey, Ukraine, United Arab Emirates, Zambia, Bulgaria, Czech Republic, Estonia, Hungary, Lithuania, Poland, Romania, Slovak Republic

Latin America:  Argentina, Aruba, Barbados, Belize, Bolivia, Brazil, British Virgin Islands, Chile, Colombia, Costa Rica, Curacao, Dominican Republic, Ecuador, El Salvador, Guatemala, Honduras, Jamaica, Mexico, Montserrat, Netherland Antilles, Nicaragua, Panama, Paraguay, Peru, Suriname, Trinidad and Tobago, Uruguay, Venezuela

Related Research

  • Global Rising Stars Since 1995 Total 857, Nov. 7, 2019
  • This Year's Corporate Default Tally Remains At 92, Oct. 31, 2019
  • Global Fallen Angels Since 1995 Total 983, Oct. 30, 2019
  • Faltering Economic Growth Adds Risks To Global Credit Conditions, Report Says, Oct. 1, 2019
  • Global Refinancing--Rated Corporate Debt Due Through 2024 Nears $12 Trillion, July 31, 2019

This report does not constitute a rating action.

Credit Markets Research:Sudeep K Kesh, New York (1) 212-438-7982;
sudeep.kesh@spglobal.com
Research Contributor:Sundaram Iyer, CRISIL Global Analytical Center, an S&P affiliate, Mumbai

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