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Credit Trends: 'BBB' Pulse: Potential Fallen Angels Remain Stable In August, With Five Outlook Revisions To Stable And Just One Downgrade

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Credit Trends: 'BBB' Pulse: Potential Fallen Angels Remain Stable In August, With Five Outlook Revisions To Stable And Just One Downgrade

The general trend of gradual improvement in credit quality continued into August. French hotel chain operator Accor S.A. was the sole addition to the fallen angel tally in August (issuers downgraded to speculative grade from investment grade). This brought the total number to 41, representing $350 billion in rated debt. This is the lowest number of additions to the list since April this year.

As a result, this issuer has been removed from the list of potential fallen angels. (Potential fallen angels are issuers rated 'BBB-' with negative outlooks or ratings on CreditWatch with negative implications.) In addition, we've removed another seven from the list, bringing the tally down from 120 to 119 despite having added seven issuers. This continues the downtrend from a record high of 126 in May and June. Moreover, for the first time this year, the majority of the removals from the list were due to outlook revisions to stable on 'BBB-' rated issuers, as opposed to transitioning to either actual fallen angels or being withdrawn. Of the other seven removals, American Equity Investment Life Holding Co., Brunswick Corp., Conagra Brands Inc., PotlatchDeltic Corp., and Tabcorp Holdings Ltd. saw revisions to stable outlooks.

Fallen Angel Risk Remains Highest In Lodging/Leisure

April's rapid rise in fallen angel incidence followed the rapid dislocation of credit markets due to the COVID-19 pandemic and knock-on effects on the economy, capital markets, and revenue generation of many corporations. While both the economy and revenue generation remain strained, access to capital markets significantly improved since late March and early April.

This month's only fallen angel, Accor S.A., was downgraded to speculative grade as S&P Global Ratings revised its view on earnings and debt metrics on the company in light of the pandemic (see "Accor S.A. Downgraded To 'BB+' On Likelihood Of Weaker Metrics Until 2022 Due To COVID-19 Impact; Outlook Negative," Aug. 17, 2020). That there was only one addition has at least paused the upward trend in the ratio of fallen angels to investment-grade issuers.

Chart 1

image

As we have highlighted over the past few months, lodging and leisure (a subset of the media and entertainment sector) has seen the highest potential fallen angel risk stemming from COVID-19. Besides Accor's downgrade, we continue to see this sector lead the tally of potential fallen angels among nonfinancial corporations. It also holds one of the highest proportions of those with ratings on CreditWatch negative at 36%, suggesting a more imminent risk of downgrade (90 days) as opposed to negative outlooks (six to 24 months).

Chart 2

image

Potential Fallen Angel Trends Point To Further Stabilization In Credit Quality

The slight increase in new additions to potential fallen angels is counterbalanced by the continued decline in the overall tally, and especially the five removals driven by outlook revisions to stable.

Three new additions from utilities (all electricity/gas distributors) led this sector to rank second among nonfinancial corporates, behind media and entertainment. Unlike the latter, however, all utilities on the list are on negative outlook, and not CreditWatch. In fact, none of the seven new additions in August were on CreditWatch negative.

Chart 3

image

More generally, the proportion of potential fallen angels on CreditWatch with negative implications fell to 11% from 13% last month, well below its five-year high of 27% in April. This smaller proportion points to a less immediate credit risk and, potentially, a slower pace of new fallen angels in the near term. A negative outlook potentially leaves more time for the issuer to recover from current challenges.

Chart 4

image

The Stabilization In The Potential Fallen Angel Tally Is Also Reflected In Market Pricing

The gradual stabilization in fallen angel risk is not only apparent in the decline of the potential fallen angel tally and the proportion of negative CreditWatch placements. It appears that the markets are also pricing in less risk relative to the peak of the COVID-19 crisis.

We collected the average spread to worst for the current crop of potential fallen angels in each sector for which data was available and found that these have come down significantly almost across the board. The exception was financial institutions, which saw the smallest increase in spreads during the crisis in the first place. The spread compression has been most pronounced for the sectors that led the additions to the potential fallen angel tally during the worst months of the pandemic--media and entertainment, oil and gas, and metals and mining. Nonetheless, these sectors continue to see spreads that are far higher than at the beginning of this year, along with retail and restaurants, travel, and real estate.

Chart 5

image

Just as the decline in the number of potential fallen angels does not mean that credit deterioration is over, neither does the decline in spreads. There is, however, a gradual improvement in the pricing of risk among these credits.

Fallen Angels Still Exhibit A General Tendency For Stability After Being Downgraded

Meanwhile, among those issuers that actually became fallen angels and were downgraded to speculative-grade, there has been a historical tendency to maintain the same credit rating afterwards. A majority of fallen angels retain the same credit ratings within a year after being downgraded (see chart 6). This is especially true in the first five months after becoming fallen angels, where only about a fifth or less of fallen angels have historically experienced one or more further downgrades.

This year, that historical trend continues despite the extraordinary stress period caused by COVID-19. In fact, this year has generally shown slightly more credit rating stability (so far) after downgrades into fallen angels than the historical norm. For the current crop of fallen angels, less than 15% have experienced further downgrades within the first five months (see chart 7). The six-month category is a special case, as these were the five issuers that became fallen angels in February prior to the COVID-19 and oil-price-related credit stresses in March. That suggests that their credit quality had already deteriorated prior to the pandemic, such that when it hit, three of them saw further weakening (being that speculative-grade companies would not tend to be able to absorb such significant shocks as well as an investment-grade company would).

This exception aside, the current crop of fallen angels, especially those that were downgraded during the pandemic, have so far displayed stability commensurate with historical norms. This is a positive sign for further stability, should the existing gradual trend of overall improvement in economic/health outcomes, credit quality, and credit conditions continue.

Chart 6

image

Chart 7

image

Two New Rising Stars But No Additional Potential Rising Stars

There were two new additions to the rising star tally in August (issuers upgraded to investment-grade from speculative-grade)-- Sobeys Inc. and Mediacom Communications Corp.--bringing this year's total to four. Both were upgraded on improved earnings and debt-to-EBITDA metrics, with the latter being upgraded two notches to 'BBB'. Meanwhile, Sobeys Inc. comes from last month's list of potential rising stars (issuers rated 'BB+' with positive outlooks or ratings on CreditWatch with positive implications). With no new additions and one removal (Triton International Ltd.), there are seven remaining potential rising stars this month.

Nonetheless, the gap between rising stars and fallen angels this year remains the widest since the 2008-2009 financial crisis.

Chart 8

image

Table 1

Accor's Downgrade In August Takes Overall Count Of Fallen Angels For 2020 To 41
Date Issuer To From Sector/subsector Country Rated debt affected (Mil. US$)
8/17/2020

Accor S.A.

BB+ BBB- Media and entertainment France 5,490.0
7/31/2020

Valeo S.A.

BB+ BBB- Automotive France 4,108.0
7/20/2020

IHO Verwaltungs GmbH

BB+ BBB- Automotive Germany 8,608.0
7/14/2020

Zijin Mining Group Co. Ltd.

BB+ BBB- Metals, mining, and steel China 350.0
7/9/2020

Emaar Properties PJSC

BB+ BBB- Homebuilders/real estate companies United Arab Emirates 3,250.0
7/9/2020

DIFC Investments Ltd.

BB+ BBB- Homebuilders/real estate companies United Arab Emirates 1,400.0
7/8/2020

Braskem S.A. (Odebrecht S.A.)

BB+ BBB- Chemicals, packaging, and environmental services Brazil 4,150.0
6/26/2020

Axis Bank Ltd.

BB+ BBB- Financial institutions India 1,095.0
6/23/2020

Carnival Corp.

BB- BBB- Media and entertainment Panama 9,265.0
6/15/2020

Tech Data Corp.

BB BBB- High technology U.S. 3,750.0
6/15/2020

Embraer S.A.

BB+ BBB- Aerospace and defense Brazil 500.0
5/28/2020

Rolls-Royce PLC (Rolls-Royce Holdings PLC)

BB BBB- Aerospace and defense U.K. 3,996.0
5/26/2020

Multibank Inc. y Subsidiarias

BB+ BBB Financial institutions Panama 300.0
5/22/2020

Trinity Industries Inc.

BB+ BBB- Transportation U.S. 400.0
5/20/2020

International Consolidated Airlines Group, S.A.

BB BBB- Transportation Spain 1,086.0
5/20/2020

Deutsche Lufthansa AG

BB+ BBB- Transportation Germany 1,086.0
5/20/2020

British Airways PLC

BB BBB- Transportation U.K. 806.0
4/20/2020

Hillenbrand Inc.

BB+ BBB- Capital goods U.S. 1,250.0
4/10/2020

Rockies Express Pipeline LLC

BB+ BBB- Midstream U.S. 2,050.0
4/9/2020

Renault S.A.

BB+ BBB- Automotive France 24,979.0
4/3/2020

ZF Friedrichshafen AG

BB+ BBB- Automotive Germany 7,027.0
4/2/2020

Service Properties Trust

BB+ BBB- Homebuilders/real estate companies U.S. 5,350.0
4/2/2020

Royal Caribbean Cruises Ltd.

BB BBB- Media and entertainment U.S. 1,750.0
3/27/2020

Continental Resources Inc.

BB+ BBB- Oil and gas U.S. 5,200.0
3/27/2020

Esselunga SpA

BB+ BBB- Retail/restaurants Italy 1,105.0
3/27/2020

Trinidad Generation Unlimited

BB+ BBB- Utilities Trinidad and Tobago 600.0
3/26/2020

Apache Corp.

BB+ BBB Oil and gas U.S. 11,080.0
3/26/2020

Western Midstream Operating LP (Occidental Petroleum Corp.)

BB+ BBB- Midstream U.S. 8,120.0
3/26/2020

Marks & Spencer PLC (Marks & Spencer Group PLC)

BB+ BBB- Retail/restaurants U.K. 2,068.0
3/26/2020

Patterson-UTI Energy Inc.

BB+ BBB Oil and gas U.S. 875.0
3/25/2020

Ford Motor Co.

BB+ BBB- Automotive U.S. 113,862.0
3/25/2020

Occidental Petroleum Corp.

BB+ BBB Oil and gas U.S. 43,913.0
3/24/2020

Delta Air Lines Inc.

BB BBB- Transportation U.S. 4,550.0
3/23/2020 Immobiliare Grande Distribuzione SIIQ S.p.A. BB+ BBB- Homebuilders/real estate companies Italy 855.0
2/24/2020

Ruby Pipeline LLC

BB BBB- Midstream U.S. 825.0
2/18/2020

Macy's Inc.

BB+ BBB- Retail/restaurants U.S. 7,149.0
2/14/2020

Kraft Heinz Co. (The)

BB+ BBB- Consumer products U.S. 31,539.0
2/4/2020

EQM Midstream Partners LP

BB+ BBB- Utilities U.S. 3,500.0
2/3/2020

EQT Corp.

BB+ BBB- Utilities U.S. 4,945.0
1/31/2020

Spirit AeroSystems Inc.

BB BBB- Aerospace and defense U.S. 1,900.0
1/13/2020

Atlantia SpA

BB- BBB- Utilities Italy 16,297.0
Data as of Aug. 31, 2020. Source: S&P Global Ratings Research. Fallen angels are defined as investment-grade issuers currently with bonds outstanding that have been downgraded into speculative-grade (i.e. from BBB- or above, to BB+ or below). Includes all rated issuers with valid outstanding debt at the time of the rating action. Valid debt includes issuer level debt (both secured and unsecured), bank loans, subordinated debt, medium term notes, preferred stock, convertible debt and drawdowns under MTN programs and excludes commercial paper programs, shelf registrations, certificates of deposit, and debt rated on a confidential basis.

Table 2

Potential Fallen Angels Count Dipped To 119
'BBB-' rated issuers with negative outlooks or on CreditWatch with negative implications
Subsector Issuer CreditWatch negative/Negative outlook New to the list this month Country Region Debt amount (mil. US$)
Financial institutions

AIB Group PLC

Negative Ireland Europe 6,067.0
Utilities

Abertis Infraestructuras S.A.

Negative Spain Europe 17,948.0
Financial institutions

Ally Financial Inc.

Negative U.S. U.S. 18,840.0
Chemicals, packaging, and environmental services

Alpek, S.A.B. de C.V.

Watch Neg Mexico Latin America 1,450.0
Media and entertainment

Amadeus IT Group S.A.

Negative Spain Europe 3,870.0
Metals, mining, and steel

ArcelorMittal

Negative Luxembourg Europe 13,269.0
Financial institutions

Argo Group International Holdings Ltd.

Negative U.S. U.S. 275.0
Capital goods

Ashtead Group PLC

Negative U.K. Europe 3,000.0
Retail/restaurants

Auchan Holding

Negative France Europe 9,063.0
Automotive

AutoNation Inc.

Negative U.S. U.S. 2,000.0
Transportation

Aviation Capital Group LLC

Negative U.S. U.S. 5,028.0
High technology

Avnet Inc.

Watch Neg Yes U.S. U.S. 1,200.0
Transportation

Avolon Holdings Ltd.

Negative Cayman Islands U.S. 10,649.0
Financial institutions

Bank of Ireland Group PLC

Negative Ireland Europe 7,430.0
Homebuilders/real estate companies

Beijing Capital Group Co. Ltd.

Negative China Asia/Pacific 500.0
Chemicals, packaging, and environmental services

Beijing Haidian State-Owned Asset Investment Group Co. Ltd.

Negative Yes China Asia/Pacific 500.0
Telecommunications

Bharti Airtel Ltd.

Negative India Asia/Pacific 4,398.0
Aerospace and defense

Boeing Co.

Negative Yes U.S. U.S. 45,698.0
Financial institutions

BrightSphere Investment Group Inc.

Negative U.S. U.S. 400.0
Homebuilders/real estate companies

Brookfield Property REIT Inc.

Negative U.S. U.S. 13,700.0
Financial institutions

CIT Bank N.A.

Negative U.S. U.S. 550.0
Metals, mining, and steel

Cameco Corp.

Negative Canada Canada 763.0
Retail/restaurants

Capri Holdings Ltd.

Negative British Virgin Islands Europe 450.0
Metals, mining, and steel

Carpenter Technology Corp.

Negative U.S. U.S. 850.0
Forest products and building materials

Celulosa Arauco y Constitucion, S.A. (ARAUCO)

Negative Chile Latin America 3,900.0
Oil and gas

Cenovus Energy Inc.

Negative Canada Canada 5,824.0
Homebuilders/real estate companies

China Jinmao Holdings Group Ltd.

Negative Hong Kong Asia/Pacific 1,732.0
Media and entertainment

Choice Hotels International Inc.

Negative U.S. U.S. 800.0
Oil and gas

Cimarex Energy Co.

Negative U.S. U.S. 2,000.0
Homebuilders/real estate companies

Citycon Oyj

Negative Finland Europe 2,316.0
Retail/restaurants

Darden Restaurants Inc.

Negative U.S. U.S. 1,250.0
Oil and gas

Devon Energy Corp.

Negative U.S. U.S. 7,550.0
Oil and gas

Diamondback Energy Inc

Negative U.S. U.S. 6,935.0
Financial institutions

Discover Financial Services

Negative U.S. U.S. 11,939.0
Homebuilders/real estate companies

EPR Properties

Negative U.S. U.S. 3,486.0
Forest products and building materials

Eagle Materials Inc.

Watch Neg U.S. U.S. 350.0
Oil and gas

Ecopetrol S.A.

Negative Colombia Latin America 9,850.0
Utilities

Eesti Energia AS

Negative Yes Estonia Europe 953.0
Utilities

Empresa Nacional del Petroleo

Negative Chile Latin America 2,480.0
Merchant power

Enable Midstream Partners LP

Negative U.S. U.S. 1,850.0
Midstream

Energy Transfer LP

Negative U.S. U.S. 48,702.0
Media and entertainment

Expedia Group Inc.

Negative U.S. U.S. 7,024.0
Financial institutions

FCE Bank PLC

Negative U.K. Europe 8,860.0
Financial institutions

Financiera de Desarrollo Territorial S.A. FINDETER

Negative Colombia Latin America 500.0
Transportation

FirstGroup PLC

Negative U.K. Europe 1,166.0
Capital goods

Flowserve Corp.

Negative U.S. U.S. 1,395.0
Capital goods

Fluor Corp.

Negative U.S. U.S. 1,695.0
Automotive

GKN Holdings Ltd.

Negative U.K. Europe 1,000.0
Utilities

Gas Natural de Lima y Callao S.A.

Negative Yes Peru Latin America 320.0
Metals, mining, and steel

Gerdau S.A.

Negative Brazil Latin America 3,150.0
Diversified

Grupo de Inversiones Suramericana S.A.

Negative Colombia Latin America 850.0
Oil and gas

Hess Corp.

Negative U.S. U.S. 7,600.0
Media and entertainment

Host Hotels & Resorts Inc.

Watch Neg U.S. U.S. 5,200.0
Aerospace and defense

Howmet Aerospace Inc

Negative U.S. U.S. 7,182.0
Media and entertainment

Hyatt Hotels Corp.

Watch Neg U.S. U.S. 2,950.0
Financial institutions

ICICI Bank Ltd.

Negative India Asia/Pacific 3,197.0
Media and entertainment

ITV PLC

Negative U.K. Europe 2,024.0
Utilities

Indigo Group S.A.

Negative France Europe 2,352.0
Merchant power

Innergex Renewable Energy Inc.

Negative Canada Canada 122.0
Midstream

Inter Pipeline Ltd.

Negative Canada Canada 3,797.0
Media and entertainment

InterContinental Hotels Group PLC

Negative U.K. Europe 1,995.0
Financial institutions

Intercorp Financial Services Inc.

Negative Peru Latin America 600.0
Retail/restaurants

Kohl's Corp.

Negative U.S. U.S. 3,200.0
Media and entertainment

Las Vegas Sands Corp.

Watch Neg U.S. U.S. 10,300.0
Automotive

Lear Corp.

Negative U.S. U.S. 2,300.0
Utilities

Madrilena Red de Gas, S.A.U.

Negative Yes Spain Europe 1,131.0
Oil and gas

Marathon Oil Corp.

Negative U.S. U.S. 5,252.0
Financial institutions

Marex Spectron Group Ltd.

Negative U.K. Europe 6.0
Media and entertainment

Marriott International Inc.

Watch Neg U.S. U.S. 10,937.0
Retail/restaurants

Metro AG

Negative Germany Europe 1,995.0
Capital goods

Metso Outotec Oyj

Negative Yes Finland Europe 476.0
Metals, mining, and steel

Minsur S.A.

Watch Neg Peru Latin America 450.0
Consumer products

Molson Coors Beverage Co.

Negative U.S. U.S. 7,734.0
Chemicals, packaging, and environmental services

Mosaic Co. (The)

Negative U.S. U.S. 4,870.0
Financial institutions

Nelnet Inc.

Negative U.S. U.S. 200.0
Consumer products

Next PLC

Watch Neg U.K. Europe 1,499.0
Automotive

Nexteer Automotive Group Ltd.

Negative Cayman Islands U.S. 250.0
Automotive

Nissan Motor Co. Ltd.

Negative Japan Asia/Pacific 7,047.0
Retail/restaurants

Nordstrom Inc.

Negative U.S. U.S. 3,566.0
Financial institutions

Nova Ljubljanska Banka D.D.

Negative Slovenia Europe 286.0
Consumer products

Ocean Spray Cranberries Inc.

Negative U.S. U.S. 150.0
Financial institutions

Ohio National Financial Services Inc.

Negative U.S. U.S. 975.0
Oil and gas

Ovintiv Inc.

Negative U.S. U.S. 6,450.0
Utilities

PT Pelabuhan Indonesia III (Persero)

Negative Indonesia Asia/Pacific 500.0
Utilities

PT Perusahaan Gas Negara Tbk.

Negative Indonesia Asia/Pacific 1,975.0
Consumer products

PVH Corp.

Negative U.S. U.S. 3,528.0
Financial institutions

Permanent TSB PLC

Negative Ireland Europe 8.0
Automotive

Peugeot S.A.

Negative France Europe 18,754.0
Financial institutions

Prospect Capital Corp.

Negative U.S. U.S. 5,497.0
Utilities

Puget Energy Inc.

Negative U.S. U.S. 6,278.0
High technology

Rakuten Inc.

Negative Japan Asia/Pacific 800.0
Sovereign

Republic of Colombia

Negative Colombia Latin America 27,965.0
Media and entertainment

Resorts World Las Vegas LLC

Negative U.S. U.S. 1,400.0
Homebuilders/real estate companies

Retail Opportunity Investments Corp.

Negative U.S. U.S. 500.0
Sovereign

Romania

Negative Romania Europe 43,353.0
Media and entertainment

SKYCITY Entertainment Group Ltd.

Negative New Zealand Asia/Pacific 332.0
Midstream

Southeast Supply Header LLC

Watch Neg U.S. U.S. 400.0
Transportation

Stagecoach Group PLC

Negative U.K. Europe 533.0
Forest products and building materials

Standard Industries Inc.

Negative U.S. U.S. 5,753.0
Consumer products

Steelcase Inc.

Negative U.S. U.S. 450.0
Consumer products

Suedzucker AG

Negative Germany Europe 1,786.0
High technology

Sunrise Communications Group AG

Watch Neg Switzerland Europe 3,782.0
Forest products and building materials

Suzano S.A.

Negative Brazil Latin America 4,650.0
Financial institutions

Synchrony Financial

Negative U.S. U.S. 8,000.0
Financial institutions

Synovus Financial Corp.

Negative U.S. U.S. 1,930.0
Consumer products

Sysco Corp.

Negative U.S. U.S. 12,820.0
Financial institutions

Tanner Servicios Financieros S.A.

Negative Chile Latin America 470.0
Consumer products

Tapestry Inc.

Negative U.S. U.S. 1,600.0
Capital goods

Timken Co. (The)

Negative U.S. U.S. 850.0
Chemicals, packaging, and environmental services

UPL Corp. Ltd.

Negative Mauritius Eastern Europe/Middle East/Africa 1,700.0
High technology

VMware Inc.

Negative U.S. U.S. 4,750.0
Metals, mining, and steel

Vale S.A.

Negative Brazil Latin America 7,450.0
Financial institutions

Virgin Money UK PLC

Negative U.K. Europe 4,867.0
Forest products and building materials

West Fraser Timber Co. Ltd.

Negative Canada Canada 300.0
Capital goods

Westinghouse Air Brake Technologies Corp.

Negative U.S. U.S. 4,000.0
Utilities

Yangzhou Urban Construction State-owned Assets Holding (Group) Co. Ltd.

Negative China Asia/Pacific 300.0
Homebuilders/real estate companies

Yuexiu Real Estate Investment Trust

Negative Hong Kong Asia/Pacific 400.0
Automotive

Zhejiang Geely Holding Group Co. Ltd.

Watch Neg China Asia/Pacific 3,241.0
Transportation

easyJet PLC

Watch Neg U.K. Europe 1,786.0
Includes all rated issuers with valid outstanding debt at the time of the rating action. Valid debt includes issuer level debt (both secured and unsecured), bank loans, subordinated debt, medium term notes, preferred stock, convertible debt and drawdowns under MTN programs and excludes commercial paper programs, shelf registrations, certificates of deposit, and debt rated on a confidential basis. Data as of Aug. 31, 2020. Source: S&P Global Ratings Research. Potential fallen angels are defined as issuers rated ‘BBB-‘ by S&P Global Ratings with negative outlooks or ratings on CreditWatch with negative implications, and which currently have bonds outstanding.

Table 3

Approximately 35% Of Fallen Angels In 2020 So Far Have Been Multinotch Downgrades
Rating (%) BB+ BB BB- B+ B B- CCC/C D
AAA 0 0 0 0 0 0 0 0
AA+ 0 0 0 0 0 0 0 0
AA 0 0 0 0 0 0 0 0
AA- 0 0 0 0 0 0 0 0
A+ 0 0 0 0 0 0 0 0
A 0 0 0 0 0 0 0 0
A- 0 0 0 0 0 0 0 0
BBB+ 0 0 0 0 0 0 0 0
BBB 10 0 0 0 0 0 0 0
BBB- 66 20 5 0 0 0 0 0
Data as of Aug. 31, 2020. Source: S&P Global Ratings Research. Fallen angels are defined as investment-grade issuers currently with bonds outstanding that have been downgraded into speculative-grade (i.e., from 'BBB-' or above, to 'BB+' or below).

Table 4

Potential Rising Stars At Seven
Subsector Issuer CreditWatch positive/Positive outlook Country Debt amount (mil. US$)
Utilities

AES Corp. (The)

Positive U.S. 8,206.0
High technology

Ericsson (Telefonaktiebolaget L.M.)

Positive Sweden 2,191.0
Automotive

Fiat Chrysler Automobiles N.V.

Watch Pos Netherlands 24,839.0
Financial institutions

FleetCor Technologies Inc.

Positive U.S. 3,040.0
Consumer products

JDE Peet's N.V.

Positive Netherlands 5,806.0
Insurance

Magellan Health Inc.

Watch Pos U.S. 400.0
Transportation

Sovcomflot PAO

Positive Russia 750.0
Includes all rated issuers with valid outstanding debt at the time of the rating action. Valid debt includes issuer level debt (both secured and unsecured), bank loans, subordinated debt, medium term notes, preferred stock, convertible debt and drawdowns under MTN programs and excludes commercial paper programs, shelf registrations, certificates of deposit, and debt rated on a confidential basis. Data as of Aug. 31, 2020. Source: S&P Global Ratings Research. Potential rising stars are defined as issuers rated ‘BB+‘ by S&P Global Ratings with positive outlooks or ratings on CreditWatch with positive implications, and which currently have bonds outstanding.

Table 5

Four Rising Stars In Year-To-Date 2020
Date Issuer To From Sector/subsector Country Rated debt affected (mil. US$)
1/23/2020

WellCare Health Plans Inc.

BBB- BB Insurance U.S. 1,950.0
6/1/2020

FGL Holdings

BBB- BB+ Insurance Cayman Islands 550.0
8/18/2020

Sobeys Inc. (Empire Co. Ltd.)

BBB- BB+ Retail/restaurants Canada 717.0
8/21/2020

Mediacom Communications Corp.

BBB BB+ Telecommunications U.S. 20,700.0
Includes all rated issuers with valid outstanding debt at the time of the rating action. Valid debt includes issuer level debt (both secured and unsecured), bank loans, subordinated debt, medium term notes, preferred stock, convertible debt and drawdowns under MTN programs and excludes commercial paper programs, shelf registrations, certificates of deposit, and debt rated on a confidential basis. Data as of Aug. 31, 2020. Source: S&P Global Ratings Research. Rising stars are defined as speculative-grade issuers currently with bonds outstanding that have been upgraded into investment-grade (i.e., from 'BB+' or below, to 'BBB-' or above).

Related Research

This report does not constitute a rating action.

Credit Markets Research:Vincent R Conti, Singapore + 65 6216 1188;
vincent.conti@spglobal.com
Sudeep K Kesh, New York (1) 212-438-7982;
sudeep.kesh@spglobal.com
Sarah Limbach, Paris + 33 14 420 6708;
Sarah.Limbach@spglobal.com
Research Contributors:Lyndon Fernandes, CRISIL Global Analytical Center, an S&P affiliate, Mumbai
Shripati Pranshu, Mumbai;
shripati.pranshu@spglobal.com

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