Key Takeaways
- Potential fallen angels fell to 111 as of Oct. 12 from 119 at end-August as five issuers moved to speculative grade and four saw revised outlooks.
- Fallen angels total 46 so far this year, accounting for $366 billion in rated debt (as of Oct. 12).
- The proportion of potential fallen angels on CreditWatch negative dropped below 5%, following a record high of 27% in April, suggesting downgrade risk for potential fallen angels has become much less immediate.
- The cost of borrowing has tightened across the ratings spectrum, though the gap between the 'BBB-' and 'BB+' rating levels remains significant.
Five companies have become fallen angels (issuers downgraded to 'BB+' or below from 'BBB-' or higher) since our last report, pushing this year's count to 46 (as of Oct. 12), representing $366 billion in rated debt. These recent fallen angels were from five different sectors:
- Washington-based fashion retailer Nordstrom Inc.
- Pennsylvania-based aerospace engineering company Howmet Aerospace Inc.
- Peruvian mining company Minsur S.A.
- Delaware midstream company Southeast Supply Header LLC
- Missouri-based real estate investment trust EPR Properties
All but Southeast Supply Header LLC have been downgraded due to the impact from the coronavirus pandemic. As a result, the ratio of fallen angels to total investment-grade-rated ('BBB-' or higher) issuers ticked up further, staying above its 10-year average for the sixth consecutive month.
Chart 1
Credit Trends In The 'BBB' Category Continue To Stabilize
Following their downgrades into speculative grade ('BB+' or lower), these five companies were removed from our 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, four--Devon Energy Corp., Gerdau S.A., Marathon Oil Corp., and Next PLC--due to outlook revisions, as opposed to downgrades or rating withdrawals.
We added four issuers, one each from the financial institutions; media and entertainment; sovereign; and chemicals, packaging, and environmental services sectors. All were assigned negative outlooks as a consequence of the impact from the coronavirus pandemic. This brings our total tally of potential fallen angels to 111 as of Oct. 12, down from 119 in August and a record high of 126 in May and June. This downward trend illustrates stabilization of credit trends in the 'BBB' rating category.
Immediate Downgrade Potential Eases Significantly For Potential Fallen Angels
Only five potential fallen angels (less than 5% of the total) are placed on CreditWatch negative, compared with 106 assigned negative outlooks. In August, this share was 11%, after peaking at 27% in April. The reduction of this ratio points to less immediate downgrade risk and, potentially, a slower pace of new fallen angels in the near term. The estimated time frame of a potential downgrade is 90 days for a negative CreditWatch placement, compared with six to 24 months for a negative outlook (see "Guide To Credit Rating Essentials"). Put differently, a negative outlook leaves more time for the issuer to recover from current challenges.
Chart 2
Fallen angel risk as measured by potential fallen angels is stabilizing due to downgrades and revisions of outlooks and CreditWatch placements. While we certainly expect capital market volatility in the weeks and months ahead due to a combination of the resurging COVID-19 pandemic and uncertainty surrounding the U.S. political climate, there is less sectoral concentration among potential fallen angels than in prior months. Specifically, sectors that saw four or five fallen angel downgrades this year now each contribute fewer than 10 potential fallen angels to our list, and none with a negative CreditWatch placement except for the automotive sector (China-based Zhejiang Geely Holding Group Co. Ltd. has been on CreditWatch negative since April 3).
Media and entertainment (including lodging) remains the most vulnerable sector to global social distancing measures but is also seeing an improved trend. As of Oct. 12, this sector had only 12 potential fallen angels, only one on CreditWatch negative (Las Vegas Sands Corp.). The sector has seen three fallen angel downgrades so far this year. The gradual reopening of economies around the world over the summer seems to have mitigated near-term risk in the hospitality sector, with U.S. hotel companies Marriott International Inc., Hyatt Hotels Corp., and Host Hotels & Resorts Inc. taken off CreditWatch negative, although S&P Global Ratings does maintain negative outlooks for these companies.
The remaining three potential fallen angels on CreditWatch negative are from the technology sector (Avnet Inc. and Sunrise Communications Group AG) and forest products and building materials (U.S.-based Eagle Materials Inc.).
Chart 3a
Chart 3b
This Year's Fallen Angels Reflect The Impact Of The Pandemic
The auto and transportation sectors, two of the three sectors with the highest number of fallen angels so far this year, had highly stable investment-grade segments over the two years leading up to the pandemic, with only one fallen angel in transportation in 2019. The impact of the pandemic led to sharp increases for both sectors, with the number of fallen angels rising to five in each. With potential fallen angels gradually stabilizing--though still at exceptionally high levels--we expect new fallen angels in these sectors to slow.
Chart 4
Cost Of Falling Into Speculative Grade Down From Record Highs In March
In March, the incremental cost of borrowing for issuers dropping into speculative grade reached an all-time high. This has since changed, with this cost now marginally below the 2009 peak, though it remains far above its pre-COVID-19 level.
Despite incremental costs staying high, spreads for the current potential fallen angels have continued to show easing risk premia compared with the peak at the end of March.
Chart 5
Chart 6
Rising Stars At Five This Year; Potential Rising Stars Tick Up To 12
With a new addition to our list of rising stars (issuers upgraded to investment grade from speculative grade) in September, this year's count increased to five as of Oct. 12. Mobile TeleSystems PJSC was upgraded following the upgrade of its parent, Sistema PJSFC. This issuer is the first rising star outside of North America this year and the second from the telecommunications sector. Despite this addition, the count of rising stars remains by far at its lowest level since 1995.
Chart 7
Meanwhile, five new potential rising stars (issuers rated 'BB+' with positive outlooks or ratings on CreditWatch positive) have increased the tally to 12. All the additions are from the U.S., three of them--Lennar Corp., MDC Holdings Inc., and Shimao Group Holdings Ltd.--from the homebuilders and real estate sector. The two remaining additions are forest products supplier PulteGroup Inc. and power producer Vistra Corp.
Except for Vistra Corp., which we added following its upgrade to 'BB+', these issuers became potential rising stars thanks to outlook revisions. Following the new additions, forest products and homebuilders are the two leading sectors in potential rising stars. The geographic breakdown of potential rising stars shows that eight of the total 12 are from the U.S., three are from Europe, and one is from Russia.
Chart 8
Table 1
Five New Fallen Angels Push This Year's Count To 46 | ||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Date | Issuer | To | From | Sector/subsector | Country | Rated debt affected (mil. $) | ||||||||
10/12/2020 |
EPR Properties |
BB+ | BBB- | Homebuilders/real estate companies | U.S. | 3,486 | ||||||||
9/22/2020 |
Southeast Supply Header LLC |
BB+ | BBB- | Midstream | U.S. | 400 | ||||||||
9/21/2020 |
Minsur S.A. (Breca Mineria S.A.C. and Subsidiaries) |
BB+ | BBB- | Metals, mining, and steel | Peru | 450 | ||||||||
9/9/2020 |
Howmet Aerospace Inc |
BB+ | BBB- | Aerospace and defense | U.S. | 7,182 | ||||||||
9/3/2020 |
Nordstrom Inc. |
BB+ | BBB- | Retail/restaurants | U.S. | 3,566 | ||||||||
8/17/2020 |
Accor S.A. |
BB+ | BBB- | Media and entertainment | France | 5,490 | ||||||||
7/31/2020 |
Valeo S.A. |
BB+ | BBB- | Automotive | France | 4,108 | ||||||||
7/20/2020 |
IHO Verwaltungs GmbH |
BB+ | BBB- | Automotive | Germany | 8,608 | ||||||||
7/14/2020 |
Zijin Mining Group Co. Ltd. |
BB+ | BBB- | Metals, mining, and steel | China | 350 | ||||||||
7/9/2020 |
Emaar Properties PJSC |
BB+ | BBB- | Homebuilders/real estate companies | U.A.E. | 3,250 | ||||||||
7/9/2020 |
DIFC Investments Ltd. |
BB+ | BBB- | Homebuilders/real estate companies | U.A.E. | 1,400 | ||||||||
7/8/2020 |
Braskem S.A. (Odebrecht S.A.) |
BB+ | BBB- | Chemicals, packaging, and environmental services | Brazil | 4,150 | ||||||||
6/26/2020 |
Axis Bank Ltd. |
BB+ | BBB- | Financial institutions | India | 1,095 | ||||||||
6/23/2020 |
Carnival Corp. |
BB- | BBB- | Media and entertainment | Panama | 9,265 | ||||||||
6/15/2020 |
Tech Data Corp. |
BB | BBB- | High technology | U.S. | 3,750 | ||||||||
6/15/2020 |
Embraer S.A. |
BB+ | BBB- | Aerospace and defense | Brazil | 500 | ||||||||
5/28/2020 |
Rolls-Royce PLC (Rolls-Royce Holdings PLC) |
BB | BBB- | Aerospace and defense | U.K. | 3,996 | ||||||||
5/26/2020 |
Multibank Inc. y Subsidiarias |
BB+ | BBB | Financial institutions | Panama | 300 | ||||||||
5/22/2020 |
Trinity Industries Inc. |
BB+ | BBB- | Transportation | U.S. | 400 | ||||||||
5/20/2020 |
Deutsche Lufthansa AG |
BB+ | BBB- | Transportation | Germany | 1,086 | ||||||||
5/20/2020 |
International Consolidated Airlines Group S.A. |
BB | BBB- | Transportation | Spain | 1,086 | ||||||||
5/20/2020 |
British Airways PLC |
BB | BBB- | Transportation | U.K. | 806 | ||||||||
4/20/2020 |
Hillenbrand Inc. |
BB+ | BBB- | Capital goods | U.S. | 1,250 | ||||||||
4/10/2020 |
Rockies Express Pipeline LLC |
BB+ | BBB- | Midstream | U.S. | 2,050 | ||||||||
4/9/2020 |
Renault S.A. |
BB+ | BBB- | Automotive | France | 24,979 | ||||||||
4/3/2020 |
ZF Friedrichshafen AG |
BB+ | BBB- | Automotive | Germany | 7,027 | ||||||||
4/2/2020 |
Service Properties Trust |
BB+ | BBB- | Homebuilders/real estate companies | U.S. | 5,350 | ||||||||
4/2/2020 |
Royal Caribbean Cruises Ltd. |
BB | BBB- | Media and entertainment | U.S. | 1,750 | ||||||||
3/27/2020 |
Continental Resources Inc. |
BB+ | BBB- | Oil and gas | U.S. | 5,200 | ||||||||
3/27/2020 |
Esselunga SpA |
BB+ | BBB- | Retail/restaurants | Italy | 1,105 | ||||||||
3/27/2020 |
Trinidad Generation Unlimited |
BB+ | BBB- | Utilities | Trinidad and Tobago | 600 | ||||||||
3/26/2020 |
Apache Corp. |
BB+ | BBB | Oil and gas | U.S. | 11,080 | ||||||||
3/26/2020 |
Western Midstream Operating LP (Occidental Petroleum Corp.) |
BB+ | BBB- | Midstream | U.S. | 8,120 | ||||||||
3/26/2020 |
Marks & Spencer PLC (Marks & Spencer Group PLC) |
BB+ | BBB- | Retail/restaurants | U.K. | 2,068 | ||||||||
3/26/2020 |
Patterson-UTI Energy Inc. |
BB+ | BBB | Oil and gas | U.S. | 875 | ||||||||
3/25/2020 |
Ford Motor Co. |
BB+ | BBB- | Automotive | U.S. | 113,862 | ||||||||
3/25/2020 |
Occidental Petroleum Corp. |
BB+ | BBB | Oil and gas | U.S. | 43,913 | ||||||||
3/24/2020 |
Delta Air Lines Inc. |
BB | BBB- | Transportation | U.S. | 4,550 | ||||||||
3/23/2020 | Immobiliare Grande Distribuzione SIIQ S.p.A. | BB+ | BBB- | Homebuilders/real estate companies | Italy | 855 | ||||||||
2/24/2020 |
Ruby Pipeline LLC |
BB | BBB- | Midstream | U.S. | 825 | ||||||||
2/18/2020 |
Macy's Inc. |
BB+ | BBB- | Retail/restaurants | U.S. | 7,149 | ||||||||
2/14/2020 |
Kraft Heinz Co. (The) |
BB+ | BBB- | Consumer products | U.S. | 31,539 | ||||||||
2/4/2020 |
EQM Midstream Partners LP |
BB+ | BBB- | Utilities | U.S. | 3,500 | ||||||||
2/3/2020 |
EQT Corp. |
BB+ | BBB- | Utilities | U.S. | 4,945 | ||||||||
1/31/2020 |
Spirit AeroSystems Inc. |
BB | BBB- | Aerospace and defense | U.S. | 1,900 | ||||||||
1/13/2020 |
Atlantia SpA |
BB- | BBB- | Utilities | Italy | 16,297 | ||||||||
Fallen angels are defined as issuers currently with bonds outstanding that have been downgraded to speculative grade from investment grade (that is, to 'BB+' or below from 'BBB-' or above). 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 Oct. 12, 2020. Source: S&P Global Ratings Research. |
Table 2
Potential Fallen Angels Count Drops To 111 | ||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
'BBB-' rated issuers with negative outlooks or ratings 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 | 7,218 | |||||||||
Utilities |
Abertis Infraestructuras S.A. |
Negative | Spain | Europe | 18,521 | |||||||||
Financial institutions |
Ally Financial Inc. |
Negative | U.S. | U.S. | 17,850 | |||||||||
Media and entertainment |
Amadeus IT Group S.A. |
Negative | Spain | Europe | 4,729 | |||||||||
Metals, mining, and steel |
ArcelorMittal |
Negative | Luxembourg | Europe | 13,233 | |||||||||
Financial institutions |
Argo Group International Holdings Ltd. |
Negative | U.S. | U.S. | 275 | |||||||||
Capital goods |
Ashtead Group PLC |
Negative | U.K. | Europe | 3,000 | |||||||||
Retail/restaurants |
Auchan Holding |
Negative | France | Europe | 8,999 | |||||||||
Automotive |
AutoNation Inc. |
Negative | U.S. | U.S. | 2,000 | |||||||||
Transportation |
Aviation Capital Group LLC |
Negative | U.S. | U.S. | 5,028 | |||||||||
High technology |
Avnet Inc. |
Watch Neg | U.S. | U.S. | 1,200 | |||||||||
Transportation |
Avolon Holdings Ltd. |
Negative | Cayman Islands | U.S. | 10,149 | |||||||||
Financial institutions |
Bank of Ireland Group PLC |
Negative | Ireland | Europe | 7,716 | |||||||||
Homebuilders/real estate companies | Beijing Capital Group Co. Ltd. | Negative | China | Asia-Pacific | 500 | |||||||||
Chemicals, packaging, and environmental services |
Beijing Haidian State-Owned Asset Investment Group Co. Ltd. |
Negative | China | Asia-Pacific | 500 | |||||||||
Telecommunications |
Bharti Airtel Ltd. |
Negative | India | Asia-Pacific | 4,392 | |||||||||
Aerospace and defense |
Boeing Co. |
Negative | U.S. | U.S. | 45,698 | |||||||||
Financial institutions |
BrightSphere Investment Group Inc. |
Negative | U.S. | U.S. | 400 | |||||||||
Homebuilders/real estate companies |
Brookfield Property REIT Inc. |
Negative | U.S. | U.S. | 13,700 | |||||||||
Financial institutions |
CIT Bank N.A. |
Negative | U.S. | U.S. | 550 | |||||||||
Metals, mining, and steel |
Cameco Corp. |
Negative | Canada | Canada | 761 | |||||||||
Retail/restaurants | Capri Holdings Ltd. | Negative | British Virgin Islands | Europe | 450 | |||||||||
Metals, mining, and steel |
Carpenter Technology Corp. |
Negative | U.S. | U.S. | 850 | |||||||||
Forest products and building materials | Celulosa Arauco y Constitucion S.A. (ARAUCO) | Negative | Chile | Latin America | 3,900 | |||||||||
Oil and gas |
Cenovus Energy Inc. |
Negative | Canada | Canada | 5,824 | |||||||||
Homebuilders/real estate companies |
China Jinmao Holdings Group Ltd. |
Negative | Hong Kong | Asia-Pacific | 1,737 | |||||||||
Media and entertainment |
Choice Hotels International Inc. |
Negative | U.S. | U.S. | 1,250 | |||||||||
Oil and gas |
Cimarex Energy Co. |
Negative | U.S. | U.S. | 2,000 | |||||||||
Homebuilders/real estate companies |
Citycon Oyj |
Negative | Finland | Europe | 2,296 | |||||||||
Retail/restaurants |
Darden Restaurants Inc. |
Negative | U.S. | U.S. | 1,250 | |||||||||
Oil and gas |
Diamondback Energy Inc |
Negative | U.S. | U.S. | 6,935 | |||||||||
Financial institutions |
Discover Financial Services |
Negative | U.S. | U.S. | 11,939 | |||||||||
Forest products and building materials |
Eagle Materials Inc. |
Watch Neg | U.S. | U.S. | 350 | |||||||||
Oil and gas |
Ecopetrol S.A. |
Negative | Colombia | Latin America | 9,850 | |||||||||
Utilities |
Eesti Energia AS |
Negative | Estonia | Europe | 946 | |||||||||
Utilities |
Empresa Nacional del Petroleo |
Negative | Chile | Latin America | 2,480 | |||||||||
Merchant Power | Enable Midstream Partners LP | Negative | U.S. | U.S. | 1,850 | |||||||||
Midstream |
Energy Transfer LP |
Negative | U.S. | U.S. | 46,302 | |||||||||
Media and entertainment | Expedia Group Inc. | Negative | U.S. | U.S. | 7,019 | |||||||||
Financial institutions |
FCE Bank PLC |
Negative | U.K. | Europe | 8,802 | |||||||||
Financial institutions |
Financiera de Desarrollo Territorial S.A. FINDETER |
Negative | Colombia | Latin America | 500 | |||||||||
Transportation |
FirstGroup PLC |
Negative | U.K. | Europe | 1,137 | |||||||||
Capital goods |
Flowserve Corp. |
Negative | U.S. | U.S. | 1,891 | |||||||||
Capital goods |
Fluor Corp. |
Negative | U.S. | U.S. | 1,691 | |||||||||
Automotive | GKN Holdings Ltd. | Negative | U.K. | Europe | 975 | |||||||||
Utilities | Gas Natural de Lima y Callao S.A. | Negative | Peru | Latin America | 320 | |||||||||
Financial institutions | Golub Capital BDC Inc. | Negative | Yes | U.S. | U.S. | 400 | ||||||||
Diversified |
Grupo de Inversiones Suramericana S.A. |
Negative | Colombia | Latin America | 850 | |||||||||
Oil and gas | Hess Corp. | Negative | U.S. | U.S. | 7,600 | |||||||||
Media and entertainment |
Host Hotels & Resorts Inc. |
Negative | U.S. | U.S. | 5,200 | |||||||||
Media and entertainment |
Hyatt Hotels Corp. |
Negative | U.S. | U.S. | 2,950 | |||||||||
Financial institutions |
ICICI Bank Ltd. |
Negative | India | Asia-Pacific | 3,197 | |||||||||
Media and entertainment |
ITV PLC |
Negative | U.K. | Europe | 2,010 | |||||||||
Utilities |
Indigo Group S.A. |
Negative | France | Europe | 2,335 | |||||||||
Media and entertainment |
Informa PLC |
Negative | Yes | U.K. | Europe | 2,577 | ||||||||
Merchant Power |
Innergex Renewable Energy Inc. |
Negative | Canada | Canada | 122 | |||||||||
Midstream |
Inter Pipeline Ltd. |
Negative | Canada | Canada | 3,788 | |||||||||
Media and entertainment |
InterContinental Hotels Group PLC |
Negative | U.K. | Europe | 2,771 | |||||||||
Financial institutions |
Intercorp Financial Services Inc. |
Negative | Peru | Latin America | 600 | |||||||||
Sovereign | Morocco | Negative | Yes | Morocco | Eastern Europe/Middle East/Africa | 5,797 | ||||||||
Retail/restaurants |
Kohl's Corp. |
Negative | U.S. | U.S. | 3,200 | |||||||||
Media and entertainment |
Las Vegas Sands Corp. |
Watch Neg | U.S. | U.S. | 10,300 | |||||||||
Automotive |
Lear Corp. |
Negative | U.S. | U.S. | 2,300 | |||||||||
Utilities |
Madrilena Red de Gas, S.A.U. |
Negative | Spain | Europe | 1,123 | |||||||||
Financial institutions | Marex Spectron Group Ltd. | Negative | U.K. | Europe | 6 | |||||||||
Media and entertainment |
Marriott International Inc. |
Negative | U.S. | U.S. | 10,587 | |||||||||
Retail/restaurants |
Metro AG |
Negative | Germany | Europe | 1,980 | |||||||||
Capital goods | Metso Outotec Oyj | Negative | Finland | Europe | 473 | |||||||||
Consumer products | Molson Coors Beverage Co. | Negative | U.S. | U.S. | 7,346 | |||||||||
Chemicals, packaging, and environmental services | Mosaic Co. (The) | Negative | U.S. | U.S. | 4,870 | |||||||||
Financial institutions |
Nelnet Inc. |
Negative | U.S. | U.S. | 200 | |||||||||
Automotive |
Nexteer Automotive Group Ltd. |
Negative | Cayman Islands | U.S. | 250 | |||||||||
Automotive |
Nissan Motor Co. Ltd. |
Negative | Japan | Asia-Pacific | 16,559 | |||||||||
Financial institutions |
Nova Ljubljanska Banka D.D. |
Negative | Slovenia | Europe | 284 | |||||||||
Chemicals, packaging, and environmental services |
OCP S.A. |
Negative | Yes | Morocco | Eastern Europe/Middle East/Africa | 2,850 | ||||||||
Consumer products |
Ocean Spray Cranberries Inc. |
Negative | U.S. | U.S. | 150 | |||||||||
Financial institutions |
Ohio National Financial Services Inc. |
Negative | U.S. | U.S. | 975 | |||||||||
Oil and gas |
Ovintiv Inc. |
Negative | U.S. | U.S. | 6,450 | |||||||||
Utilities |
PT Pelabuhan Indonesia III (Persero) |
Negative | Indonesia | Asia-Pacific | 500 | |||||||||
Utilities |
PT Perusahaan Gas Negara Tbk. |
Negative | Indonesia | Asia-Pacific | 1,975 | |||||||||
Consumer products |
PVH Corp. |
Negative | U.S. | U.S. | 3,514 | |||||||||
Automotive |
Peugeot S.A. |
Negative | France | Europe | 18,621 | |||||||||
Financial institutions |
Prospect Capital Corp. |
Negative | U.S. | U.S. | 5,508 | |||||||||
Utilities |
Puget Energy Inc. |
Negative | U.S. | U.S. | 6,278 | |||||||||
High technology | Rakuten Inc. | Negative | Japan | Asia-Pacific | 800 | |||||||||
Sovereign | Colombia | Negative | Colombia | Latin America | 27,941 | |||||||||
Media and entertainment |
Resorts World Las Vegas LLC |
Negative | U.S. | U.S. | 1,400 | |||||||||
Homebuilders/real estate companies |
Retail Opportunity Investments Corp. |
Negative | U.S. | U.S. | 500 | |||||||||
Sovereign |
Romania |
Negative | Romania | Europe | 40,754 | |||||||||
Media and entertainment |
SKYCITY Entertainment Group Ltd. |
Negative | New Zealand | Asia-Pacific | 331 | |||||||||
Transportation |
Stagecoach Group PLC |
Negative | U.K. | Europe | 520 | |||||||||
Forest products and building materials |
Standard Industries Inc. |
Negative | U.S. | U.S. | 4,646 | |||||||||
Consumer products |
Steelcase Inc. |
Negative | U.S. | U.S. | 450 | |||||||||
Consumer products |
Suedzucker AG |
Negative | Germany | Europe | 1,773 | |||||||||
High technology |
Sunrise Communications Group AG |
Watch Neg | Switzerland | Europe | 3,752 | |||||||||
Forest products and building materials |
Suzano S.A. |
Negative | Brazil | Latin America | 5,400 | |||||||||
Financial institutions |
Synchrony Financial |
Negative | U.S. | U.S. | 8,000 | |||||||||
Financial institutions |
Synovus Financial Corp. |
Negative | U.S. | U.S. | 1,930 | |||||||||
Consumer products |
Sysco Corp. |
Negative | U.S. | U.S. | 12,066 | |||||||||
Financial institutions |
Tanner Servicios Financieros S.A. |
Negative | Chile | Latin America | 466 | |||||||||
Consumer products | Tapestry Inc. | Negative | U.S. | U.S. | 1,600 | |||||||||
Capital goods | Timken Co. (The) | Negative | U.S. | U.S. | 850 | |||||||||
Chemicals, packaging, and environmental services |
UPL Corp. Ltd. |
Negative | Mauritius | Eastern Europe/Middle East/Africa | 1,700 | |||||||||
High technology |
VMware Inc. |
Negative | U.S. | U.S. | 4,750 | |||||||||
Metals, mining, and steel |
Vale S.A. |
Negative | Brazil | Latin America | 7,450 | |||||||||
Financial institutions |
Virgin Money UK PLC |
Negative | U.K. | Europe | 4,757 | |||||||||
Forest products and building materials |
West Fraser Timber Co. Ltd. |
Negative | Canada | Canada | 300 | |||||||||
Capital goods |
Westinghouse Air Brake Technologies Corp. |
Negative | U.S. | U.S. | 3,500 | |||||||||
Homebuilders/real estate companies |
Yuexiu Real Estate Investment Trust |
Negative | Hong Kong | Asia-Pacific | 400 | |||||||||
Automotive | Zhejiang Geely Holding Group Co. Ltd. | Watch Neg | China | Asia-Pacific | 3,217 | |||||||||
Transportation |
easyJet PLC |
Negative | U.K. | Europe | 1,773 | |||||||||
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 Oct. 12, 2020. Source: S&P Global Ratings Research. |
Table 3
30% Of Fallen Angels In 2020 So Far Have Resulted From Multinotch Downgrades | ||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
(%) | ||||||||||||||||||
Rating | BB+ | BB | BB- | B+ | B | B- | CCC/C | D | ||||||||||
AAA | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | ||||||||||
AA+ | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | ||||||||||
AA | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | ||||||||||
AA- | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | ||||||||||
A+ | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | ||||||||||
A | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | ||||||||||
A- | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | ||||||||||
BBB+ | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | ||||||||||
BBB | 8.70 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | ||||||||||
BBB- | 69.57 | 17.39 | 4.35 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | ||||||||||
Fallen angels are defined as issuers currently with bonds outstanding that have been downgraded to speculative grade from investment grade (that is, to 'BB+' or below from 'BBB-' or above). Data as of Oct. 12, 2020. Source: S&P Global Ratings Research. |
Table 4
Rising Stars Increase To Five So Far This Year | ||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Date | Issuer | To | From | Sector/subsector | Country | Rated debt affected (mil. $) | ||||||||
1/23/2020 |
WellCare Health Plans Inc. |
BBB- | BB | Insurance | U.S. | 1,950 | ||||||||
6/1/2020 |
FGL Holdings |
BBB- | BB+ | Insurance | Cayman Islands | 550 | ||||||||
8/18/2020 |
Sobeys Inc. (Empire Co. Ltd.) |
BBB- | BB+ | Retail/restaurants | Canada | 717 | ||||||||
8/21/2020 |
Mediacom Communications Corp. |
BBB | BB+ | Telecommunications | U.S. | 20,700 | ||||||||
9/17/2020 |
Mobile TeleSystems PJSC (Sistema (PJSFC)) |
BBB- | BB+ | Telecommunications | Russia | 1,000 | ||||||||
Data as of Oct. 12, 2020. Source: S&P Global Ratings Research. |
Table 5
With Five Additions Since Our Last Report, We Now Count 12 Potential Rising Stars | ||||||||||
---|---|---|---|---|---|---|---|---|---|---|
Subsector | Issuer | New to the list this month | Country | Debt amount (mil. US$) | ||||||
Automotive |
Fiat Chrysler Automobiles N.V. |
Netherlands | 24,673 | |||||||
Consumer products |
JDE Peet's N.V. |
Netherlands | 5,769 | |||||||
Financial institutions |
FleetCor Technologies Inc. |
U.S. | 3,040 | |||||||
Forest products and building materials |
PulteGroup Inc. |
Yes | U.S. | 2,997 | ||||||
High technology |
Ericsson (Telefonaktiebolaget L.M.) |
Sweden | 2,182 | |||||||
Homebuilders/real estate companies |
Lennar Corp. |
Yes | U.S. | 5,400 | ||||||
Homebuilders/real estate companies |
MDC Holdings Inc. |
Yes | U.S. | 900 | ||||||
Homebuilders/real estate companies |
Shimao Group Holdings Ltd. |
Yes | Cayman Islands | 2,700 | ||||||
Insurance |
Magellan Health Inc. |
U.S. | 400 | |||||||
Transportation |
Sovcomflot PAO |
Russia | 750 | |||||||
Utilities |
AES Corp. (The) |
U.S. | 8,206 | |||||||
Utilities |
Vistra Corp. |
Yes | U.S. | 10,198 | ||||||
Data as of Oct. 12, 2020. Source: S&P Global Ratings Research. |
Related Research
- EPR Properties Downgraded To 'BB+' On Tenant Headwinds; Bonds Also Downgraded To 'BB+', Outlook Negative, Oct. 12, 2020
- Gerdau Outlook Revised To Stable From Negative On Faster-Than-Expected Demand Recovery; 'BBB-', 'brAAA' Ratings Affirmed, Oct. 9, 2020
- Lennar Corp. Outlook Revised To Positive From Stable, 'BB+' Ratings Affirmed, Oct. 8, 2020
- MDC Holdings Inc. Outlook Revised To Positive From Stable, 'BB+' Rating Affirmed On Improved Credit Metrics, Oct. 8, 2020
- PulteGroup Inc. Outlook Revised To Positive On Solid Profitability And Cash Flow, Oct. 8, 2020
- U.S.-Based Vistra Corp. Upgraded To 'BB+' On Deleveraging And Stable Operations, Oct. 2, 2020
- Host Hotels & Resorts Inc. 'BBB-' Ratings Affirmed, Removed From CreditWatch; Outlook Negative, Oct. 1, 2020
- Hyatt Hotels Corp. 'BBB-' Rating Affirmed, Removed From CreditWatch; Outlook Negative, Oct. 1, 2020
- Marriott International Inc. 'BBB-' Ratings Affirmed; Removed From CreditWatch; Outlook Negative, Oct. 1, 2020
- Devon Energy Outlook Revised to Stable From Negative On Improved Leverage; Acquisition Provides Support; Rtgs Affirmed, Sept. 29, 2020
- Next PLC Removed From CreditWatch On Expected Resilience To Weak Industry Conditions; 'BBB-/A-3' Ratings Affirmed, Sept. 23, 2020
- Southeast Supply Header LLC Downgraded To 'BB+' From 'BBB-' On Increased Recontracting Risk, Outlook Negative, Sept. 22, 2020
- Marathon Oil Corp. Outlook Revised To Stable From Negative On Improved Metrics; 'BBB-' Issuer Credit Rating Affirmed, Sept. 21, 2020
- Minsur Downgraded To 'BB+' On Parent's Weakening Credit Metrics, Stand-Alone Credit Profile Unchanged And Outlook Stable, Sept. 21, 2020
- Mobile TeleSystems PJSC Rating Raised To 'BBB-' From 'BB+' Following Upgrade Of Parent Sistema; Outlook Stable, Sept. 17, 2020
- Howmet Aerospace Inc. Downgraded To 'BB+' On Weaker Volume Expectations; Outlook Negative, Sept. 9, 2020
- Shimao Outlook Revised To Positive On Stable Operations, Improving Leverage; 'BB+' Rating Affirmed, Sept. 4, 2020
- Nordstrom Inc. Downgraded To 'BB+' From 'BBB-' On Declining Competitive Position; Outlook Negative, Sept. 3, 2020
- Guide To Credit Rating Essentials, Aug. 12, 2010
This report does not constitute a rating action.
Credit Markets Research: | Vincent R Conti, Singapore + 65 6216 1188; vincent.conti@spglobal.com |
Sarah Limbach, Paris + 33 14 420 6708; Sarah.Limbach@spglobal.com | |
Sudeep K Kesh, New York (1) 212-438-7982; sudeep.kesh@spglobal.com | |
Research Contributors: | Lyndon Fernandes, CRISIL Global Analytical Center, an S&P affiliate, Mumbai |
Shripati Pranshu, CRISIL Global Analytical Center, an S&P affiliate, Mumbai |
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