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Credit Trends: U.S. Corporate Upgrades Reach A New High In The Second Quarter

COMMENTS

Credit Trends: U.S. Corporate Bond Yields As Of Sept. 15, 2021

COMMENTS

Default, Transition, and Recovery: Third Quarter Corporate Default Tally At Lowest Level Since 2014

COMMENTS

Credit Trends: Risky Credits: Upgrade Potential Is Highest Among U.S. Media And Entertainment 'CCC' Issuers

COMMENTS

Credit Trends: The Economic Impact Of Default Is Falling As Selective Defaults Rise


Credit Trends: U.S. Corporate Upgrades Reach A New High In The Second Quarter

The number of positive rating actions for financial and nonfinancial corporate issuers rose in the second quarter of 2021, as the economic rebound fueled better-than-expected demand for most sectors, and financing conditions remained extremely favorable, with ample credit available for most issuers.

Net rating actions reached an all-time high in the second quarter, with upgrades (121) greatly outnumbering downgrades (51). Most of the upgrades were of lower-rated entities, as 58% of all upgrades were issuers rated 'B' and lower. Upgrades were led by several of the sectors hardest hit by the pandemic, and about half were of issuers that had been downgraded since the start of 2020. Furthermore, downgrades fell to the lowest number since the first quarter of 2011. Second-quarter downgrades were mostly concentrated in April and May and have slowed in recent weeks. Rating outlooks also stabilized, suggesting that the pace of downgrades will slow further.

While credit quality is improving broadly, the pace of the economic recovery is more gradual than the suddenness of its decline. There were 220 upgrades of U.S. companies in the first half of 2021, which is well below the 715 downgrades from the first half of 2020 (see chart 1). Even though economic and business conditions are improving, many sectors continue to show higher debt levels and weakened credit quality compared with the where they stood at the beginning of 2020.

Chart 1

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Negative Bias Falls Below Its Long-Term Average

For U.S. companies overall (including both investment- and speculative-grade), the negative bias (the proportion of issuers with negative outlooks or ratings on CreditWatch with negative implications) fell by eight percentage points to 19% and is now below its long-term average of 22%. This steady decline points to a further decrease in downgrade potential and indicates the number of quarterly downgrades should continue to fall.

Speculative-grade issuers had a steeper drop in their negative bias in the second quarter than investment-grade issuers. The speculative-grade ('BB+' or lower) negative bias fell by nine percentage points to 21%, and the investment-grade ('BBB-' or higher) negative bias declined by nearly six percentage points to 15% (see charts 2 and 3). The upgrade potential for both investment- and speculative-grade issuers in the U.S. increased, as the positive bias (the proportion of issuers with positive outlooks or ratings on CreditWatch with positive implications) rose by two percentage points for each. While the positive bias is now showing steady quarterly growth over the past 12 months, it hasn't risen as much as the negative bias has decreased.

Chart 2

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Chart 3

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The negative bias remains highest for issuers in the lowest rating level, with 69% of issuers rated 'CCC+' or lower having a negative bias (see chart 4). With weaker credit metrics, lower-rated entities are not as well positioned to weather a business, financial, or economic shock compared with higher-rated peers. However, with robust financing conditions providing ample liquidity and the economic recovery supporting business conditions, the pace of downgrades and defaults for the lowest-rated issuers has slowed. The negative bias has fallen for issuers rated in the 'B' category, and the positive bias has increased.

Chart 4

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In the second quarter, the most pronounced increase in upgrade potential has been for issuers rated at the low end of speculative grade: 'B-' and lower. The positive bias for issuers at this rating level rose by nearly four percentage points to 11% and is now in line with the positive bias for speculative grade overall (see chart 5).

Chart 5

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Negative Bias Continues To Decline Across All Sectors

In consecutive quarters the negative bias declined by 1% or more in each of the 18 U.S. sectors. Outlooks on many issuers have been revised to stable from negative without being downgraded as forecasts for near-term economic growth have been revised higher (see chart 6).

Chart 6

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The oil and gas sector's negative bias has fallen 39 percentage points in 2021, the most among all sectors. Outlooks have improved as OPEC+ supply cuts supported oil prices and as issuers have been able to bolster liquidity. The oil and gas sector's negative bias is currently 23%, slightly above its long-term average (21%). As we do not expect the price of U.S. West Texas Intermediate crude to stay far above the average break-even price for U.S. shale (near $50), speculative-grade oilfield services, exploration, and production companies remain vulnerable. We don't expect credit metrics in the oil and gas sector to broadly recover until 2022.

The retail and restaurant sector's negative bias has fallen 32 percentage points this year, the second most among all sectors. Outlooks have improved as the vaccine rollout has led to eased restrictions. The negative bias for the sector is currently 9%, well below its long-term average (27%).

Even though we expect a very strong recovery in consumer spending in 2021, we don't expect credit metrics in the discretionary retail industry to broadly recover until 2022.

Chart 7

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Now Fewer Sectors Show Above-Average Downgrade Potential Than Pre-Pandemic

One method we use to examine downgrade propensity is by comparing the sector's current negative bias with its historical average. Just five sectors now have a negative bias above their long-term average, down from 14 in the first quarter, and lower than the total before the pandemic began (eight sectors; see charts 8-10).

The media and entertainment negative bias at 33% is the highest among all sectors, and while it has fallen 20 percentage points this year, it remains above its long-term average (27%). Outlooks have improved as ad-supported media is expected to recover to pre-2020 credit metrics this year, and as vaccinations, fiscal stimulus, and consumer savings unlock pent-up demand for leisure travel.

We expect the recovery of pre-2020 credit metrics to be uneven, with the hardest-hit industries of out-of-home entertainment and hotels not expected to recover before 2023 and even later for the cruise industry.

The aerospace and defense negative bias has fallen 14 percentage points this year, but at 31%, it is the second highest among all sectors and remains well above its long-term average (19%). The commercial aerospace industry was severely impacted by the pandemic, and we don't expect credit metrics to recover until after 2023.

Chart 8

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Chart 9

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We use a similar approach to gauge upgrade potential, comparing a sector's current positive bias with its long-term average. There are now seven sectors that show above-average upgrade potential, up from just three in the first quarter (see chart 10).

Chart 10

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Upgrades Reach A New High

U.S. corporate upgrades reached a new record at 121 in the second quarter, surpassing the previous high of 103 from fourth-quarter 2013 (see chart 11). Of the upgrades, 60 were of "round trippers," or issuers that had been downgraded since the start of 2020. Most of these round trippers were upgraded from ratings of 'B-' or lower, and many happened after companies reported better-than-expected operating performance. These upgrades also included five investment-grade issuers from the chemicals, packaging, and environmental services sector, which were upgraded as the global economic rebound and the strength of demand from key end markets of housing and automotive are contributing to stronger operating performance in 2021.

Chart 11

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The number of downgrades fell by 24% to 51 in the second quarter, with nonfinancial corporate issuers accounting for all but four of the downgrades (see chart 14). Speculative-grade downgrades fell to 40, their lowest level since the third quarter of 2013. Investment-grade downgrades dropped to 11 from 16 in the first quarter (see chart 12).

The number of speculative-grade upgrades rose by 9% to 101, reaching a new quarterly high. Investment-grade upgrades more than tripled to 20 (see chart 13).

Chart 12

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Chart 13

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Table 1

Second-Quarter 2021 U.S. Corporate Ratings Statistics
Overall Investment-grade Speculative-grade Financial Nonfinancial
Downgrades (issuer count) 51.0 11.0 40.0 4.0 47.0
(Debt volume, $US Bil.) 292.3 217.5 74.8 1.2 291.1
Upgrades (issuer count) 121.0 20.0 101.0 7.0 114.0
(Debt volume, $US Bil.) 449.3 162.3 287.0 29.6 419.7
Total rating actions 172.0 31.0 141.0 11.0 161.0
Downgrade ratio 0.3 0.4 0.3 0.4 0.3
Historical average 0.6 0.6 0.6 0.5 0.6
High, quarter 95% 2020Q2 92% 2020Q2 95% 2020Q2 100% 2000Q3 95% 2020Q2
Low, quarter 30% 2021Q2 21% 2012Q2 25% 1997Q3 9% 1996Q3 29% 2021Q2
Negative bias 0.2 0.1 0.2 0.1 0.2
Historical average 0.2 0.2 0.3 0.2 0.2
High, quarter 44% 2020Q2 28% 2009Q3 52% 2020Q2 45% 2009Q3 46% 2020Q2
Low, quarter 11% 2013Q4 9% 2013Q4 12% 2014Q2 4% 1996Q1 11% 2014Q2
Positive bias 0.1 0.1 0.1 0.1 0.1
Historical average 0.1 0.1 0.1 0.1 0.1
High, quarter 17% 1996Q3 14% 1997Q4 23% 1996Q2 17% 2006Q1 17% 1996Q2
Low, quarter 2% 2020Q2 1% 2020Q2 2% 2020Q2 2% 2020Q3 2% 2020Q2
Historical average from 1995Q1-2021Q2. See Tables 4 and 5 for details. Rating changes exclude entities with no rated debt. Data as of June 30, 2021, Source: S&P Global Ratings Research.

83% Of Upgrades Were Of Speculative-Grade Issuers

Speculative-grade issuers accounted for 83% of the upgrades in the second quarter, and the majority of these were of issuers rated 'B-' and lower. Issuers rated 'CCC+' and lower accounted for the largest number of upgrades (33), followed by 'B-' (19), and 'B' (18).

Downgrades were also concentrated among speculative-grade ratings. Of the downgrades, 41% were issuers rated 'B-' and lower. By contrast, 22% of downgrades were of investment-grade issuers. These included one fallen angel (which is an issuer downgraded to speculative grade from investment grade): Michigan-based ProAssurance Corp. was downgraded following its acquisition of NORCAL (see chart 14). This fallen angel was outnumbered by seven rising stars (issuers upgraded to investment grade from speculative grade) in the second quarter.

Chart 14

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Hard-Hit Sectors Lead Upgrades

Retail and restaurants and media and entertainment, two of the sectors that were hardest hit by the pandemic, led upgrades in the second quarter.

The retail and restaurants sector had the highest number of upgrades with 15, up from nine in the first quarter (see chart 15). Most of the upgraded issuers were round trippers that had been downgraded in 2020. The sector accounts for the second-most upgrades year to date.

The media and entertainment sector had the second-highest number of second-quarter upgrades with 14, down from 16 in the first quarter. All the upgrades were of speculative-grade issuers, most of which had been downgraded in 2020. The sector accounts for the most upgrades year to date.

Chart 15

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Utilities And Consumer Products Sectors Lead Downgrades

The utilities sector had the highest number of downgrades in the second quarter with seven, down from 10 in the first quarter. These downgrades include one investment-grade issuer and six speculative-grade issuers (most of which are midstream companies). The largest issuer downgrade was Vistra Corp., an independent power company headquartered in Texas (downgraded to 'BB' from 'BB+').

The consumer products sector had the second-highest number of downgrades in the second quarter with six, down from eight in the first quarter. Downgrades included one investment-grade issuer and four speculative-grade issuers. The largest issuer downgrade was Serta Simmons Bedding LLC, which was downgrade twice (first downgraded to 'CC' from 'CCC+' and then to 'SD' from 'CC').

Table 2

U.S. Rating Actions By Sector (Q2 2021)
Number Mil. US$ Totals
Up Down Up Down Number Mil. US$
Aerospace & defense 2 4 4,726 13,746 6 18,472
Automotive 4 0 19,590 0 4 19,590
Capital goods 6 1 5,973 895 7 6,868
Chemicals, packaging, & environmental services 13 1 42,259 450 14 42,709
Consumer products 13 6 36,017 25,171 19 61,188
Financial institution 6 2 13,954 785 8 14,739
Forest products & building materials 1 5 350 11,200 6 11,550
Health care 11 5 50,244 35,367 16 85,611
High technology 10 4 19,065 148,691 14 167,756
Homebuilders/real estate co. 8 1 15,922 22,540 9 38,462
Insurance 1 2 15,677 400 3 16,077
Media & entertainment 14 4 36,188 6,628 18 42,816
Metals, mining, & steel 2 2 16,229 2,668 4 18,897
Oil & gas 8 4 16,318 5,335 12 21,653
Retail/restaurants 15 0 94,604 0 15 94,604
Telecommunications 2 2 35,329 2,796 4 38,125
Transportation 3 1 21,994 325 4 22,319
Utilities 2 7 4,850 15,273 9 20,123
Total 121 51 449,289 292,270 172 741,559
Media and entertainment includes leisure. Utility sector includes midstream companies. Rating changes exclude entities with no rated debt. Data as of June 30, 2021. Source: S&P Global Ratings Research.

Table 3

2016Q1-2021Q2 S&P Global Ratings Trends, U.S. Corporates
Defaulted Issuers Weakest Links Fallen Angels Rising Stars Potential Downgrades Potential Upgrades
2016Q1 30 164 9 6 307 131
2016Q2 32 186 4 4 329 140
2016Q3 25 178 5 5 316 150
2016Q4 18 177 4 4 314 138
2017Q1 17 168 5 0 285 151
2017Q2 23 153 0 9 297 145
2017Q3 9 155 2 5 292 163
2017Q4 15 146 6 3 292 173
2018Q1 18 137 1 5 284 181
2018Q2 14 143 5 4 295 188
2018Q3 3 144 4 5 302 195
2018Q4 12 144 6 2 301 178
2019Q1 21 150 4 1 307 162
2019Q2 23 167 2 2 313 148
2019Q3 13 178 3 2 317 133
2019Q4 20 195 4 7 349 127
2020Q1 21 316 13 1 570 90
2020Q2 62 429 6 1 771 41
2020Q3 37 390 3 1 721 59
2020Q4 26 339 2 1 639 111
2021Q1 15 265 2 5 485 152
2021Q2 11 191 1 7 331 212
Data as of June 30, 2021. Source: S&P Global Ratings Research.

Fewer Defaults In The Second Quarter As Weakest Links Fall Back To Pre-Pandemic Level

The number of defaults in the second quarter fell to 11, down from 15 in the first quarter--marking the fewest quarterly defaults since third quarter 2018.

The count of weakest links (issuers rated 'B-' and below with negative outlooks or on CreditWatch negative) fell to 191 in the second quarter from 265 in the first quarter. Weakest links are the issuers with the greatest risk of default, and the declining number points to fewer defaults.

After climbing above 425 during the heart of the pandemic, weakest links are now back below their level from the end of 2019. Similarly, the number of potential bond downgrades (issuers rated 'AAA' to 'B-' with negative rating outlooks or ratings on CreditWatch negative) has also dropped to just below the level from fourth quarter 2019.

With credit quality broadly improving across multiple sectors, we expect that the U.S. trailing-12-month speculative-grade corporate default rate will decline to 4% by March 2022, down from 6.3% as of March 2021. Several indicators suggest a lower default rate ahead: credit metrics are stabilizing, companies are benefiting from very favorable lending conditions, and a strong economic rebound is contributing to improved operating performance for many. However, the credit metrics remain broadly weaker from where they stood at the beginning of 2020. The share of issuers at the lowest rating levels remains near its record high, with just under 40% of all U.S. speculative-grade issuers rated 'B-' or lower, and we expect some sectors to endure a long recovery to pre-2020 credit metrics. However, we expect default risk to continue to be offset by the recovery in economic activity coupled with the ample liquidity available to speculative-grade issuers (see "The U.S. Speculative-Grade Corporate Default Rate Could Fall To 4% By March 2022," published May 26, 2021).

Table 4

U.S. Corporate Upgrades (Second Quarter 2021)
Issuer Country To From Date Sector
Peraton Corp. U.S. B+ B May 11, 2021 Aerospace & Defense
Propulsion Acquisition LLC U.S. B- CCC+ June 21, 2021 Aerospace & Defense
GC EOS Buyer Inc U.S. B- CCC+ April 23, 2021 Automotive
Goodyear Tire & Rubber Co. (The) U.S. BB- B+ May 13, 2021 Automotive
Penske Automotive Group Inc. U.S. BB+ BB May 7, 2021 Automotive
Tenneco Inc. U.S. B+ B May 12, 2021 Automotive
ASP Unifrax Holdings Inc., U.S. B- CCC+ May 28, 2021 Capital Goods
Generac Power Systems Inc. U.S. BB+ BB June 22, 2021 Capital Goods
Granite US Holdings Corp U.S. B B- June 11, 2021 Capital Goods
Hyster-Yale Materials Handling Inc. U.S. B+ B May 13, 2021 Capital Goods
Titan International Inc. U.S. B- CCC+ April 7, 2021 Capital Goods
Welbilt Inc., U.S. B- CCC+ May 6, 2021 Capital Goods
Albemarle Corp. U.S. BBB BBB- April 29, 2021 Chemicals, Packaging & Environmental Services
Chevron Phillips Chemical Co. LLC (Chevron Corp.) U.S. A- BBB+ May 26, 2021 Chemicals, Packaging & Environmental Services
CMC Materials Inc. U.S. BB+ BB April 2, 2021 Chemicals, Packaging & Environmental Services
CPG Intermediate LLC U.S. B B- May 5, 2021 Chemicals, Packaging & Environmental Services
Dow Chemical Co. (The) (Dow Inc.) U.S. BBB BBB- June 10, 2021 Chemicals, Packaging & Environmental Services
Eastman Chemical Co. U.S. BBB BBB- April 2, 2021 Chemicals, Packaging & Environmental Services
Element Solutions Inc. U.S. BB BB- April 22, 2021 Chemicals, Packaging & Environmental Services
Koppers Holdings Inc. U.S. B+ B April 8, 2021 Chemicals, Packaging & Environmental Services
LSB Industries Inc. U.S. CCC+ CCC May 27, 2021 Chemicals, Packaging & Environmental Services
Olin Corp. U.S. BB BB- April 6, 2021 Chemicals, Packaging & Environmental Services
PMHC II Inc., U.S. B- CCC+ May 6, 2021 Chemicals, Packaging & Environmental Services
Univar Solutions Inc. U.S. BB+ BB April 9, 2021 Chemicals, Packaging & Environmental Services
Westlake Chemical Corp. U.S. BBB BBB- June 30, 2021 Chemicals, Packaging & Environmental Services
Allied Universal Topco LLC U.S. B B- April 22, 2021 Consumer Products
Blue Ribbon Intermediate Holdings LLC U.S. B- CCC April 16, 2021 Consumer Products
Del Monte Foods Inc., U.S. B- CCC+ April 9, 2021 Consumer Products
Hayward Holdings Inc., U.S. BB- B+ May 10, 2021 Consumer Products
Innovative Water Care Global Corp. U.S. B- CCC+ June 30, 2021 Consumer Products
KNB Holdings Corp. U.S. CCC+ CCC- May 10, 2021 Consumer Products
KNEL Acquisition LLC U.S. B B- June 15, 2021 Consumer Products
Kontoor Brands Inc., U.S. BB- B+ May 10, 2021 Consumer Products
Latham Pool Products Inc., U.S. B+ B April 26, 2021 Consumer Products
NSA International, LLC U.S. B- CCC May 11, 2021 Consumer Products
Serta Simmons Bedding LLC U.S. CCC CCC- June 30, 2021 Consumer Products
StoneMor Inc. U.S. CCC+ CCC May 27, 2021 Consumer Products
Vista Outdoor Inc. U.S. BB- B+ June 14, 2021 Consumer Products
BBVA USA Bancshares Inc (Banco Bilbao Vizcaya Argentaria, S.A.) U.S. A- BBB+ June 2, 2021 Financial Institutions
Greystar Real Estate Partners, LLC U.S. BB- B+ May 27, 2021 Financial Institutions
OFG Bancorp U.S. B+ B April 21, 2021 Financial Institutions
Oppenheimer Holdings Inc. U.S. BB- B+ June 17, 2021 Financial Institutions
PayPal Holdings Inc., U.S. A- BBB+ June 3, 2021 Financial Institutions
TCF Financial Corp U.S. BBB+ BBB- June 9, 2021 Financial Institutions
Eagle Materials Inc. U.S. BBB BBB- May 24, 2021 Forest Products & Building Materials
Abbott Laboratories U.S. A+ A May 19, 2021 Health Care
Albany Molecular Research Inc. U.S. B B- April 16, 2021 Health Care
Aveanna Healthcare LLC (Aveanna Healthcare Holdings Inc.) U.S. B- CCC+ May 3, 2021 Health Care
Boston Scientific Corp. U.S. BBB BBB- May 27, 2021 Health Care
Community Health Systems Inc. U.S. B- CCC+ June 17, 2021 Health Care
Envision Healthcare Corp. (Envision Healthcare Holdings Inc.) U.S. CCC+ CCC June 3, 2021 Health Care
Gentiva Health Services Inc. U.S. B+ B April 7, 2021 Health Care
Heartland Dental, LLC (Hadrian Merger Sub Inc.) U.S. B- CCC+ June 3, 2021 Health Care
Premier Dental Services Inc. U.S. B- CCC+ June 3, 2021 Health Care
Primary Care (ITC) Intermediate Holdings LLC (Cano Health Inc.,) U.S. B B- June 18, 2021 Health Care
YI Group Holdings, LLC U.S. B- CCC+ May 4, 2021 Health Care
Avaya Holdings Corp. U.S. B+ B June 2, 2021 High Technology
Blackhawk Network Holdings Inc., U.S. B B- May 11, 2021 High Technology
CDW Corp. U.S. BBB- BB+ May 26, 2021 High Technology
Cohu Inc., U.S. B+ B- April 26, 2021 High Technology
Gigamon Inc. (Ginsberg HoldCo Inc.) U.S. B B- June 11, 2021 High Technology
NAB Holdings LLC U.S. B B- June 14, 2021 High Technology
Qorvo Inc., U.S. BBB- BB+ April 22, 2021 High Technology
Salesforce.com Inc. U.S. A+ A June 29, 2021 High Technology
Unisys Corp. U.S. B+ B June 28, 2021 High Technology
VeriSign Inc. U.S. BBB BBB- April 16, 2021 High Technology
Beazer Homes USA Inc. U.S. B B- June 10, 2021 Homebuilders/Real Estate Co.
Century Communities Inc., U.S. BB- B+ April 1, 2021 Homebuilders/Real Estate Co.
Lennar Corp. U.S. BBB- BB+ June 9, 2021 Homebuilders/Real Estate Co.
MDC Holdings Inc. U.S. BBB- BB+ April 9, 2021 Homebuilders/Real Estate Co.
Physicians Realty Trust U.S. BBB BBB- May 13, 2021 Homebuilders/Real Estate Co.
PulteGroup Inc., U.S. BBB- BB+ April 5, 2021 Homebuilders/Real Estate Co.
QTS Realty Trust Inc., U.S. BB BB- April 1, 2021 Homebuilders/Real Estate Co.
Shimao Group Holdings Ltd. Cayman Islands BBB- BB+ April 8, 2021 Homebuilders/Real Estate Co.
Athene Holding Ltd. Bermuda A- BBB+ May 18, 2021 Insurance
Agiliti Inc. U.S. B+ B April 30, 2021 Media & Entertainment
Airxcel Inc. U.S. B B- April 21, 2021 Media & Entertainment
AMC Entertainment Holdings Inc. U.S. CCC+ CCC- June 10, 2021 Media & Entertainment
Bioplan USA Inc., U.S. CCC+ CCC April 1, 2021 Media & Entertainment
Cars.com Inc. U.S. B+ B June 11, 2021 Media & Entertainment
Endeavor Operating Co., LLC U.S. B CCC+ April 29, 2021 Media & Entertainment
Enterprise Development Authority U.S. B B- April 1, 2021 Media & Entertainment
Everi Payments Inc. (Everi Holdings Inc.) U.S. B+ B June 21, 2021 Media & Entertainment
Gartner Inc. U.S. BB+ BB June 3, 2021 Media & Entertainment
Nexstar Media Group Inc., U.S. BB BB- April 12, 2021 Media & Entertainment
Peninsula Pacific Entertainment LLC U.S. B- CCC+ April 7, 2021 Media & Entertainment
TEGNA Inc. U.S. BB BB- June 10, 2021 Media & Entertainment
TopBuild Corp. U.S. BB+ BB May 24, 2021 Media & Entertainment
Winnebago Industries Inc., U.S. BB- B+ April 1, 2021 Media & Entertainment
Cleveland-Cliffs Inc. U.S. B B- June 22, 2021 Metals, Mining & Steel
Freeport-McMoRan Inc. U.S. BB+ BB April 2, 2021 Metals, Mining & Steel
Antero Resources Corp. U.S. BB- B May 17, 2021 Oil & Gas
Ascent Resources Utica Holdings, LLC U.S. B B- June 9, 2021 Oil & Gas
Centennial Resource Development Inc., U.S. B- CCC+ April 23, 2021 Oil & Gas
Double Eagle III Midco 1 LLC (DoublePoint Energy, LLC) U.S. BBB B- May 6, 2021 Oil & Gas
Matador Resources Co. U.S. B B- June 28, 2021 Oil & Gas
Moss Creek Resources Holdings Inc., U.S. B- CCC+ April 16, 2021 Oil & Gas
Profrac Services, LLC U.S. CCC+ CCC April 27, 2021 Oil & Gas
Woodford Express, LLC U.S. B- CCC+ May 18, 2021 Oil & Gas
Albertsons Cos. Inc., U.S. BB BB- June 9, 2021 Retail/Restaurants
Amazon.com Inc. U.S. AA AA- June 10, 2021 Retail/Restaurants
Best Buy Co. Inc. U.S. BBB+ BBB May 20, 2021 Retail/Restaurants
Brinker International Inc. U.S. BB- B+ May 18, 2021 Retail/Restaurants
Burlington Stores Inc. U.S. BB+ BB June 9, 2021 Retail/Restaurants
Conn's Inc. U.S. B B- April 16, 2021 Retail/Restaurants
Cooper's Hawk Intermediate Holding, LLC U.S. B- CCC+ May 25, 2021 Retail/Restaurants
Fogo De Chao Inc., U.S. B- CCC+ April 9, 2021 Retail/Restaurants
JOANN Inc. U.S. B B- April 27, 2021 Retail/Restaurants
Main Event Entertainment Inc., (Ardent Leisure Ltd.) U.S. B- CCC+ June 25, 2021 Retail/Restaurants
Miller's Ale House Inc., U.S. CCC+ CCC April 13, 2021 Retail/Restaurants
New Academy Holding Co. LLC U.S. B+ B May 19, 2021 Retail/Restaurants
SEG Holding, LLC (BI-LO Holding Finance, LLC) U.S. B+ B April 7, 2021 Retail/Restaurants
Wendy's Co. (The) U.S. B+ B May 26, 2021 Retail/Restaurants
Wok Holdings Inc., U.S. B- CCC+ May 27, 2021 Retail/Restaurants
Altice USA Inc., U.S. BB BB- April 22, 2021 Telecommunications
Equinix Inc. U.S. BBB BBB- April 28, 2021 Telecommunications
Air Transport Services Group Inc., U.S. BB+ BB April 7, 2021 Transportation
Allegiant Travel Co. U.S. B+ B April 15, 2021 Transportation
Burlington Northern Santa Fe LLC (Berkshire Hathaway Inc.) U.S. AA- A+ May 17, 2021 Transportation
Antero Midstream Partners LP (Antero Resources Corp.) U.S. BB- B May 19, 2021 Utility
Northern Border Pipeline Co. U.S. A- BBB+ April 13, 2021 Utility
Rating changes exclude sovereign and entities with no rated debt. Data as of June 30, 2021. Source: S&P Global Ratings Research.

Table 5

U.S. Corporate Downgrades (Second Quarter 2021)
Issuer Country To From Date Sector
General Dynamics Corp. U.S. A- A April 29, 2021 Aerospace & Defense
New Constellis Borrower, LLC (New Constellis Holdings Inc.) U.S. CCC+ B- May 6, 2021 Aerospace & Defense
Perspecta Inc. (Peraton Corp.) U.S. B+ BB May 12, 2021 Aerospace & Defense
Salient CRGT Inc., U.S. CCC B- June 17, 2021 Aerospace & Defense
Columbus McKinnon Corp. U.S. B+ BB- May 5, 2021 Capital Goods
Cornerstone Chemical Co. U.S. CCC+ B- April 16, 2021 Chemicals, Packaging & Environmental Services
Callaway Golf Co. U.S. B B+ April 6, 2021 Consumer Products
GEO Group (The) Inc. U.S. CCC+ B May 25, 2021 Consumer Products
Global IID Parent LLC U.S. B- B May 20, 2021 Consumer Products
Li & Fung Ltd. Bermuda BBB- BBB April 12, 2021 Consumer Products
Serta Simmons Bedding LLC U.S. CC CCC+ April 5, 2021 Consumer Products
Serta Simmons Bedding LLC U.S. SD CC April 19, 2021 Consumer Products
CNG Holdings Inc., U.S. B- B May 19, 2021 Financial Institutions
GreenSky Holdings, LLC U.S. B B+ April 2, 2021 Financial Institutions
ACProducts Inc., (Victors Intermediate Holding II Corp.) U.S. B- B April 27, 2021 Forest Products & Building Materials
LBM Acquisition, LLC (BCPE Ulysses Intermediate Inc.,) U.S. B- B June 21, 2021 Forest Products & Building Materials
Park River Holdings Inc., U.S. B- B May 25, 2021 Forest Products & Building Materials
Sabre Industries Inc. (Tiger Acquisition, LLC) U.S. B B+ May 11, 2021 Forest Products & Building Materials
SRS Distribution Inc., U.S. B- B May 18, 2021 Forest Products & Building Materials
AmerisourceBergen Corp. U.S. BBB+ A- June 4, 2021 Health Care
CDRH Parent Inc., U.S. CC CCC- April 7, 2021 Health Care
CDRH Parent Inc., U.S. D CC May 14, 2021 Health Care
Medical Depot Holdings Inc., U.S. SD CCC+ April 19, 2021 Health Care
Merck & Co. Inc. U.S. A+ AA- June 3, 2021 Health Care
International Business Machines Corp. U.S. A- A May 6, 2021 High Technology
Oracle Corp. U.S. BBB+ A June 22, 2021 High Technology
Rocket Software Inc., U.S. B- B May 12, 2021 High Technology
SolarWinds Holdings Inc. U.S. B B+ April 28, 2021 High Technology
Simon Property Group, Inc U.S. A- A May 19, 2021 Homebuilders/Real Estate Co.
ProAssurance Corp. U.S. BB BBB- May 6, 2021 Insurance
RLI Corp. U.S. BBB BBB+ April 27, 2021 Insurance
Automatic Data Processing Inc. U.S. AA- AA May 11, 2021 Media & Entertainment
CareerBuilder, LLC U.S. B- B June 10, 2021 Media & Entertainment
Carlson Travel Inc U.S. D CCC June 23, 2021 Media & Entertainment
Vericast Corp. U.S. CCC CCC+ May 26, 2021 Media & Entertainment
Kaiser Aluminum Corp. U.S. BB BB+ April 1, 2021 Metals, Mining & Steel
Peabody Energy Corp. U.S. SD CCC+ June 3, 2021 Metals, Mining & Steel
Basic Energy Services Inc. U.S. D CCC- April 16, 2021 Oil & Gas
BEP Ulterra Holdings Inc., U.S. CCC+ B- April 8, 2021 Oil & Gas
ION Geophysical Corp. U.S. SD CC April 14, 2021 Oil & Gas
RS Ivy Holdco Inc., U.S. B+ BB- June 15, 2021 Oil & Gas
IPC Corp. U.S. CCC- CCC April 16, 2021 Telecommunications
Premiere Global Services Inc. U.S. CCC- CCC+ May 27, 2021 Telecommunications
Overseas Shipholding Group Inc. U.S. CCC+ B- May 11, 2021 Transportation
Epic Crude Services, LP U.S. CCC+ B- April 1, 2021 Utility
Kentucky Power Co. (American Electric Power Co. Inc.) U.S. BBB+ A- April 28, 2021 Utility
Ruby Pipeline LLC U.S. CCC B- April 9, 2021 Utility
Southeast Supply Header, LLC U.S. BB- BB+ June 17, 2021 Utility
Summit Midstream Partners, LP U.S. SD CC April 15, 2021 Utility
Vistra Corp. U.S. BB BB+ April 29, 2021 Utility
WaterBridge Operating LLC (WaterBridge Resources, LLC) U.S. CCC+ B- May 12, 2021 Utility
Rating changes exclude sovereign and entities with no rated debt. Data as of June 30, 2021. Source: S&P Global Ratings Research.

Related Research

This report does not constitute a rating action.

Ratings Performance Analytics:Nick W Kraemer, FRM, New York + 1 (212) 438 1698;
nick.kraemer@spglobal.com
Evan M Gunter, New York + 1 (212) 438 6412;
evan.gunter@spglobal.com
Jon Palmer, CFA, New York;
jon.palmer@spglobal.com
Research Contributor:Lyndon Fernandes, CRISIL Global Analytical Center, an S&P affiliate, Mumbai

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