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COMMENTS

Credit Trends: 'BBB' Pulse: M&A Rebound Could Put The Corporate Credit Recovery On The Back Burner

COMMENTS

Default, Transition, and Recovery: Global Corporate Default Tally Remains At 67 As Defaults Continue To Slow

COMMENTS

Credit Trends: U.S. Corporate Bond Yields As Of Dec. 1, 2021

COMMENTS

Credit Trends: Potential Downgrades Fall While Potential Upgrades Stall

COMMENTS

Credit Trends: 'BBB' Pulse: The Future Looks Bright As Potential Rising Stars Shoot Up


Credit Trends: 'BBB' Pulse: M&A Rebound Could Put The Corporate Credit Recovery On The Back Burner

(Editor's Note: This article has been revised from its original publication to include data of fallen angels and rising stars through Sept. 30, 2021.)

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Rising stars (issuers upgraded to investment-grade from speculative grade) continue to outnumber fallen angels (issuers downgraded to speculative grade from investment-grade) so far in 2021, as the economic rebound in the U.S. and Europe continues to support business conditions. However, the pace of improvement is showing signs of moderating, as fallen angels outnumbered rising stars in the third quarter. While 'BBB' nonfinancials have benefited from plentiful cash and extremely favorable financing conditions, these attributes set the stage for more potential mergers and acquisitions that could slow the pace of credit quality improvement. Although M&A has led to a mix of downgrades and upgrades of 'BBB' issuers this year, a growing volume of M&A deals could lead to renewed credit weakening, particularly if deals signal increasingly aggressive financial policies.

Fallen Angel Debt Is Estimated Around $100 Billion

For our hypothetical scenario in this report, we estimated the amount of long-term nonfinancial corporate 'BBB' category rated debt vulnerable to being downgraded to speculative grade over the next 12 months in the U.S. and EMEA by assigning fallen angel probabilities to each rating and outlook or CreditWatch combination as of Aug. 31, 2021. These hypothetical relative probabilities and the approach used to generate the estimates are summarized in table 5 in the Appendix. The estimated results were as follows:

  • We estimate that about $100 billion in 'BBB' category debt from nonfinancial companies in the U.S. and EMEA could be downgraded to speculative grade over the next 12 months--representing about 2% of total 'BBB' nonfinancial debt (see chart 1).
  • From the U.S., this includes roughly $68 billion, or about 2.2% of the outstanding total long-term 'BBB' debt on Aug. 31.
  • From EMEA, this includes around $32.2 billion, or 1.5% of outstanding nonfinancial 'BBB' debt.

There has been $24.7 billion in debt associated with nonfinancial corporate fallen angel downgrades in the U.S. and EMEA in 2021 through September. While our estimate of fallen angel debt is markedly higher than this year-to-date total, it represents about 57% of the debt associated with potential fallen angels (issuers rated 'BBB-' with either a negative outlook or CreditWatch), which show elevated risk of downgrade to speculative grade.

Chart 1

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The number of potential fallen angels (and their associated debt) has steadily declined since reaching a high in the summer of 2020. As of the end of September, there are 28 nonfinancial potential fallen angels in the U.S. and EMEA with close to $177 billion in associated debt, back near the levels from the end of 2019 (see chart 2). By contrast, there are fewer nonfinancial potential rising stars (issuers rated 'BB+' with either a positive outlook or CreditWatch) in the U.S. and EMEA (with 14), and these issuers have less associated debt (with about $79 billion).

Chart 2

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Since May 2021, the outstanding debt of U.S. and EMEA nonfinancial potential fallen angels decreased by nearly $40 billion, with $31 billion of the decrease due to favorable outlook revisions to stable or positive (see chart 3). However, the pace of the improvements appears to be moderating in recent months. More than 70% of this decrease in potential fallen angel debt over this period occurred in June and July.

Chart 3

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Conditions Are Ripe For Rising M&A

M&A activity has come back strong as the economic rebound has taken hold.

Accommodative financing conditions and low funding costs may continue to fuel elevated M&A activity.   The number of M&A deals (of $500 million or more, regardless of whether the target was rated) jumped to about 250 in fourth-quarter 2020 (up 66% over the prior quarter), and the quarterly numbers have since continued to rise. Accommodative financing conditions are providing plentiful funding while 'BBB' bond yields remain near record lows. Furthermore, elevated inflation measures in recent months imply a negative real yield on 'BBB' bonds, and the possibility of borrowing at negative rates further incentivizes future deals with debt financing (see chart 4).

Chart 4

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Among 'BBB' issuers, cash is plentiful and financial policies are generally looser than in 2020.   In 2020, investment-grade issuers raised record levels of debt to fund operations and build cash reserves as the pandemic-related slowdown spread. For many companies, the business impact of COVID-19 was not as damaging as initially expected, and the incremental cash raised remains on balance sheets. This cash presents a considerable stockpile of dry powder that could be used to pay extraordinary dividends or pursue acquisitions. 'BBB' issuers' aggregate cash levels have been growing over the past 15 years as the number of 'BBB' issuers has nearly doubled. Companies appear to have begun drawing down from this cash after reserves reached a peak in 2020, and we estimate that 'BBB' nonfinancials in the U.S. and EMEA still have over $1.1 trillion in cash on their balance sheets (see chart 5).

Chart 5

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'BBB' borrowers are especially sensitive to large, debt-financed acquisitions, which can potentially trigger a downgrade--sometimes to speculative grade. Even cash-funded acquisitions can weaken credit metrics when they reflect a change to a more aggressive financial policy. This is not to suggest that all M&A transactions are negative for credit. Some can result in an upgrade if the deal does not materially weaken the financial risk profile and the combination benefits the new group's business risk profile.

Aside from a downgrade, we could affirm the rating of the buyer if we expect the financial profile of the new entity to fully recover, usually within about two years after the deal closes and following a temporary deterioration in credit metrics. Many of the transactions that 'BBB' issuers closed in the last few months fell under this category.

One recent example is the proposed merger of Discovery Inc. with Warner Media in May 2021. After the announcement of this $43 billion bid for Warner Media, we affirmed Discovery's rating at 'BBB-', as the combined entity would be the second largest global media company and the merger would also address Discovery's existing business risks of smaller scale and narrow content. However, the practical execution of this deal remains the main risk that could pressure the rating. Should synergies not materialize and profit growth and cash generation fall short of expectations, then the new entity's credit metrics may fall below those consistent with the 'BBB-' rating.

M&A Has Already Contributed To Several Fallen Angels In 2021…

One of the most recent M&A-related fallen angels is Perrigo, a Dublin-based global consumer self-care company, which announced its plan to acquire the French self-care company Héra SAS for $2.1 billion. Following the announcement, we lowered Perrigo's rating by two notches to 'BB' from 'BBB-', as we believed Perrigo's use of existing cash and new debt to finance the acquisition would lead to deteriorating credit metrics that would not be offset by the increase in scale and products.

Through September of this year, M&A has led to six fallen angels. These fallen angels include G4S PLC from the consumer products sector and Standard Industries Inc. from the forest products and building materials sector. Downgrades we considered to be M&A-related also include those that followed a divestiture or a spinoff that resulted in lowered credit quality, such as through reduced scale or diversification.

In addition to the downgrades that followed specific M&A announcements, Host Hotels & Resorts' downgrade was indirectly related to M&A. While Host Hotels was not downgraded due to an announced acquisition, its downgrade followed management's characterization of the company's cash reserves as a strategic advantage for making opportunistic acquisitions, and we thought this shift in financial policy could increase net leverage.

Chart 6

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…While Other M&A Deals Have Boosted Rising Stars

Acquisitions can be also be positive for credit, even if these cases are less common.   Take, for example, the recent acquisition of U.S. biopharmaceutical group Alexion by AstraZeneca. We upgraded AstraZeneca's 'BBB+' rating to 'A-' because the acquisition stands to increase the group's penetration into the profitable disease market, and most of the purchase price was financed by the issuance of new shares, significantly reducing the potential negative impact on AstraZeneca's financial risk profile.

One of the most recent M&A-related rising stars, Dell Technologies Inc.'s issuer credit rating was raised to 'BBB' from 'BB+' on Sept. 29, 2021, as it remains on track to complete its planned spinoff of VMware Inc. by early November and as its financial performance has been better than we anticipated due mostly to continued PC strength. While Dell is the largest issuer to become a rising star so far in 2021, much of Dell's rated debt was already investment-grade prior to the upgrade.

Through September of this year, mergers and acquisitions have led to eight of the upgrades for rising stars. These M&A-related upgrades include all four from the oil and gas sector, as each was either acquired by, or merged with, a higher-rated entity (see chart 7).

Chart 7

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Financing Conditions Present A Window Of Opportunity For Deal-Making

COVID-19 has led to the acceleration of structural changes that were already underway in some sectors. Some companies are pursuing M&A deals to speed their adaptation. In the energy sector, the transition to renewable energy is redefining strategic priorities, just as the pharmaceutical industry is rapidly applying recent COVID-related advancements to new fields, and the consumer and retail sectors are adapting to consumers' changing habits and behaviors.

In this context, extremely accommodative financing conditions in the credit markets this year are supporting the rising levels of M&A activity. Funding costs remain low, and many companies are pursuing acquisitions that they are trying to close before the Federal Reserve begins tapering and ahead of potential tax increases in the U.S.

'BBB' funding costs continue to hover near their all-time low, and this cheap funding provides opportunities for strategic investments. 'BBB' bond yields averaged 2.4% in August, which is less than half the long-term average and below recent U.S. inflation measures (see chart 8). In July and August, 'BBB' spreads were largely unchanged, widening by just 6 basis points (bps) from their all-time tightest point at the end of June (see chart 9).

Chart 8

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Chart 9

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With the 'BBB' spread this narrow, the funding cost of a notch (between 'BBB-' and 'BB+') has fallen by 13 bps so far in the third quarter, and is just slightly more narrow than the long-term average cost of a notch (see chart 10). With such an incremental risk premium, companies may be tempted to risk adopting more aggressive financial policies that could lower credit quality or potentially lead to a downgrade.

Chart 10

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While we don't expect to see a rush of companies pursuing transactions that would lead to downgrades, we are beginning to see that companies are willing to adopt more aggressive financial policies involving existing cash or new debt. Where these policies contribute to weaker credit metrics, they leave companies less prepared to weather the next unexpected shock or downturn.

So far this year, 'BBB' category bond issuance is down 44% in the U.S. and down 18% in Europe (see charts 11 and 12). Record issuance volume in 2020 makes for difficult comparisons year-over-year, but 2021 issuance so far is outpacing the volume from 2019 in both the U.S. and EMEA. After an even slower-than-normal August, investment-grade issuance rebounded in September, setting a new one-day record in the U.S. on Sept. 7, following a holiday weekend. Looking forward, many bankers are reportedly expecting heightened issuance volumes through the end of 2021 as companies try to lock in rates in advance of the Fed's eventual tapering.

Chart 11

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Chart 12

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Credit Trends Remain Favorable, But With A More Balanced Mix Of Fallen Angels And Rising Stars

Credit trends for issuers in the 'BBB' category as well as crossover credits remain favorable, even if the pace of improvement is moderating. Rising stars continue to outnumber fallen angels so far in 2021 (by 20 to 11 for nonfinancials in the U.S. and EMEA). By dollar amount, rising star debt exceeds that of fallen angels by $133 billion year-to-date for nonfinancials in the U.S. and EMEA (see chart 13).

However, fallen angels outnumbered rising stars in the third quarter (six to five), and the number of fallen angels equaled that of rising stars over the last two months. There were five nonfinancial fallen angels in the U.S. and EMEA in August and September, including Resorts World Las Vegas LLC, Genting New York LLC, Carpenter Technology Corp., Entergy New Orleans LLC and Perrigo Co. PLC. This equaled the number of rising stars over the same period

Chart 13

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The pace of improvement in 'BBB' credit quality has diverged in the U.S. and EMEA in recent months. The trailing 12-month downgrade rate of 'BBB' nonfinancials has ticked modestly higher in the U.S. (up to 4.5%), even as the downgrade rate in EMEA continued its decline (falling to 1.67%). However, both downgrade rates are down compared to last year (see chart 14).

Chart 14

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While the pace of downgrades has diverged, outlooks continue to point toward fewer downgrades on the horizon from the 'BBB' category. Negative bias (issuers with a negative outlook or CreditWatch) has fallen in recent months for the 'BBB' category, down by two percentage points in the U.S. and down by four percentage points in EMEA (see chart 15).

Chart 15

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Overview Of Global Potential Fallen Angels And Rising Stars

Globally and across financial and nonfinancial sectors (excluding sovereigns), the number of potential fallen angels fell to 46 in September, from 65 at the end of May (chart 16). Close to $232 billion in debt is associated with potential fallen angels, and the sectors with the largest amounts of associated debt include aerospace and defense (with $61 billion) and media and entertainment (with $48 billion). While Boeing Co. accounts for nearly all of the potential fallen angel debt associated with the aerospace and defense sector, the debt from the media and entertainment sector is more widely split among nine issuers (see chart 17).

Chart 16

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Chart 17

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Although the number of potential rising stars globally remains below that of potential fallen angels, the gap continues to narrow. The number of potential rising stars is up to 25 in September, from 19 at the end of May (see chart 18). Nearly $111 billion in debt is associated with potential rising stars (including financial services), with the largest amounts of associated debt in health care (with $37.6 billion) and consumer products sectors (with 21.9 billion). The largest potential rising stars include HCA Healthcare Inc., Netflix Inc., JBS S.A., and Newell Brands Inc. (see chart 19). Note that when we base these amounts on the debt potentially affected by a rising star upgrade (or fallen angel downgrade), we include all rated debt of an issuer.

Chart 18

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Chart 19

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Table 1

20 Fallen Angels Through September 2021
Date Issuer To From Sector/subsector Country Rated debt affected (mil. $)
2/5/2021 Hexcel Corp. BB+ BBB- Aerospace and defense U.S. 700
2/17/2021 TechnipFMC Plc BB+ BBB+ Oil and gas U.K. 2,572
3/16/2021 Host Hotels & Resorts Inc. BB+ BBB- Media and entertainment U.S. 4,750
3/25/2021 Empresa Nacional del Petroleo BB+ BBB- Utilities Chile 2,480
4/2/2021 Kingdom of Morocco BB+ BBB- Sovereign Morocco 8,773
4/16/2021 OCP S.A. BB+ BBB- Chemicals, packaging, and environmental services Morocco 2,850
4/22/2021 G4S PLC (Allied Universal Topco LLC) B BBB- Consumer products U.K. 1,867
5/6/2021 ProAssurance Corp. BB BBB- Insurance U.S. 250
5/19/2021 Republic of Colombia BB+ BBB- Sovereign Colombia 30,184
5/20/2021 Ecopetrol S.A. BB+ BBB- Oil and gas Colombia 9,850
5/20/2021 Grupo de Inversiones Suramericana S.A. BB+ BBB- Diversified Colombia 550
5/20/2021 Financiera de Desarrollo Territorial S.A. FINDETER BB+ BBB- Financial institutions Colombia 500
7/26/2021 Standard Industries Inc. BB+ BBB- Forest products and building materials U.S. 7,491
7/26/2021 Rakuten Group Inc. BB+ BBB- High technology Japan 3,726
8/4/2021 Carpenter Technology Corp. BB+ BBB- Metals, mining, and steel U.S. 700
8/13/2021 BrightSphere Investment Group Inc. BB+ BBB- Financial institutions U.S. 400
8/20/2021 Resorts World Las Vegas LLC (Genting Bhd.) BB+ BBB- Media and entertainment U.S. 1,750
8/20/2021 Genting New York LLC (Genting Bhd.) BB+ BBB- Media and entertainment U.S. 525
9/2/2021 Entergy New Orleans, LLC (Entergy Corp) BB+ BBB Utilities U.S. 325
9/10/2021 Perrigo Company plc BB BBB- Health care Ireland 1,200
Data as of Sept. 30, 2021. 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. Source: S&P Global Ratings Research.

Table 2

23 Rising Stars Through September 2021
Date Issuer To From Sector/subsector Country Rated debt affected (mil. $)
07-Jan-21 WPX Energy Inc., BBB- BB- Oil and gas U.S. 4,750
08-Jan-21 Fiat Chrysler Automobiles N.V. BBB- BB+ Automotive Netherlands 25,561
13-Jan-21 Parsley Energy, LLC. BBB BB Oil and gas U.S. 4,750
01-Feb-21 Norbord Inc. BBB- BB Forest products and building materials Canada 665
23-Feb-21 Advanced Micro Devices Inc. BBB- BB+ High technology U.S. 1,305
24-Feb-21 Smurfit Kappa Group PLC BBB- BB+ Forest products and building materials Ireland 2,125
18-Mar-21 QEP Resources Inc. BBB- B Oil and gas U.S. 1,600
18-Mar-21 Grupo Cementos de Chihuahua S.A.B. de C.V. BBB- BB+ Forest products and building materials Mexico 260
30-Mar-21 Triton International Ltd. BBB- BB+ Transportation Bermuda 6,098
05-Apr-21 PulteGroup Inc., BBB- BB+ Homebuilders/real estate co. U.S. 2,097
08-Apr-21 Shimao Group Holdings Ltd. BBB- BB+ Homebuilders/real estate co. Cayman Islands 2,100
09-Apr-21 MDC Holdings Inc. BBB- BB+ Homebuilders/real estate co. U.S. 900
12-Apr-21 Sovcomflot PAO BBB- BB+ Transportation Russia 750
22-Apr-21 Qorvo Inc., BBB- BB+ High technology U.S. 1,550
06-May-21 Double Eagle III Midco 1 LLC (DoublePoint Energy, LLC) BBB B- Oil and gas U.S. 550
26-May-21 CDW Corp. BBB- BB+ High technology U.S. 6,940
09-Jun-21 Lennar Corp. BBB- BB+ Homebuilders/real estate co. U.S. 5,000
20-Aug-21 CF Industries Inc. (CF Industries Holdings, Inc) BBB- BB+ Chemicals, packaging, and environmental services U.S. 3,000
24-Aug-21 KION Group AG BBB- BB+ Capital goods Germany 584
02-Sep-21 Braskem S.A. (Odebrecht S.A.) BBB- BB+ Chemicals, packaging, and environmental services Brazil 3,250
07-Sep-21 Tech Data Corp. BBB- BB High technology U.S. 1,000
9/21/2021 Holding Co. Metalloinvest JSC BBB- BB+ Metals, mining, and steel Russia 800
29-Sep-21 Dell Technologies Inc. BBB BB+ High technology U.S. 86,536
Data as of Sept. 30, 2021. Rising stars are defined as speculative-grade issuers currently with bonds outstanding that have been upgraded into investment-grade (i.e. from 'BB+' and below, to 'BBB-' and 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. Source: S&P Global Ratings Research.

Table 3

Potential Fallen Angels Count Drops To 47 After Six Removals; Two CreditWatch Negative Placements
'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 Debt amount (mil. US$)
Utilities Abertis Infraestructuras S.A. Negative Spain 21,360
Utilities Adani Electricity Mumbai Ltd. Negative India 1,000
Financial institutions AIB Group PLC Negative Ireland 8,028
Homebuilders/real estate companies Altarea SCA Negative France 2,102
Media and entertainment Amadeus IT Group S.A. Negative Spain 5,256
Financial institutions Argo Group International Holdings Ltd. Negative U.S. 275
Transportation Avolon Holdings Ltd. Negative Cayman Islands 7,637
Financial institutions Bank of Ireland Group PLC Negative Ireland 9,210
Aerospace and defense Boeing Co. Negative U.S. 58,923
Metals, mining, and steel Cameco Corp. Negative Canada 787
Telecommunications CAS Holding No.1 Ltd. Negative British Virgin Islands 3,534
Homebuilders/real estate companies China Jinmao Holdings Group Ltd. Negative Hong Kong 1,050
Utilities Cleco Corporate Holdings LLC Negative U.S. 2,643
Forest products and building materials Domtar Corp. Watch Neg U.S. 500
Transportation easyJet PLC Negative U.K. 3,153
Utilities Eesti Energia AS Negative Estonia 584
Merchant Power Enable Midstream Partners, LP Negative U.S. 1,850
Media and entertainment Expedia Group Inc., Negative U.S. 9,409
Financial institutions FCE Bank PLC Negative U.K. 4,996
Homebuilders/real estate companies First Capital Real Estate Investment Trust Negative Canada 1,850
Transportation FirstGroup PLC Negative U.K. 711
Capital goods Fluor Corp. Negative U.S. 1,684
Aerospace and defense Huntington Ingalls Industries Inc. Negative U.S. 2,150
Media and entertainment Hyatt Hotels Corp. Watch Neg U.S. 2,700
Media and entertainment Informa PLC Negative U.K. 2,770
Media and entertainment InterContinental Hotels Group PLC Negative U.K. 2,823
Financial institutions Intercorp Financial Services Inc. Negative Peru 600
Consumer products ISS A/S Negative Denmark 2,453
Media and entertainment ITV PLC Negative U.K. 1,986
Media and entertainment JCDecaux S.A. Negative France 2,277
Media and entertainment Las Vegas Sands Corp. Negative U.S. 10,300
Financial institutions Marex Group PLC Negative U.K. 50
Media and entertainment Marriott International Inc. Negative U.S. 10,387
Consumer products Meituan Negative Cayman Islands 2,000
Retail/restaurants Metro AG Negative Germany 1,956
Consumer products Molson Coors Beverage Co. Negative U.S. 6,334
Utilities National Gas Co. of Trinidad & Tobago Ltd. (The) Negative Trinidad and Tobago 400
Automotive Nissan Motor Co. Ltd. Negative Japan 17,886
Utilities PT Pelabuhan Indonesia III (Persero) Negative Indonesia 500
Sovereign Republic of Trinidad and Tobago Negative Trinidad and Tobago 2,231
Oil and gas SK Innovation Co. Ltd., Negative Korea 500
Homebuilders/real estate companies SL Green Realty Corp. Negative U.S. 10,400
Consumer products Steelcase Inc. Negative U.S. 450
Consumer products Suedzucker AG Negative Germany 1,752
Financial institutions Tanner Servicios Financieros S.A. Negative Chile 350
Chemicals, packaging, and environmental services UPL Corp. Ltd. Negative Mauritius 1,200
Automotive Zhejiang Geely Holding Group Co. Ltd., Negative China 3,198
Data as of Sept. 30, 2021. 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. This debt may be rated above or below the issuer credit rating. 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. Source: S&P Global Ratings Research.

Table 4

Potential Rising Stars At 25 Through September 2021
Subsector Issuer Outlook/Creditwatch change New to the list this month Country Debt amount (mil. US$)
Chemicals, packaging, and environmental services Alpek, S.A.B. de C.V. (Alfa S.A.B. de C.V.) Positive Mexico 2,050
Financial institutions Cadence Bancorp. Watch Pos U.S. 85
Financial institutions CIT Group Inc., Watch Pos U.S. 5,151
Financial institutions Clipper Acquisitions Corp. Positive U.S. 675
Oil and gas Continental Resources Inc. Positive U.S. 4,200
Media and entertainment CoStar Group Inc. Positive U.S. 1,000
Utility EQT Corp. Positive U.S. 4,267
Financial institutions FleetCor Technologies Inc., Positive U.S. 4,375
Metals, mining, and steel Gold Fields Ltd. Positive South Africa 1,000
Health care HCA Healthcare Inc., Positive U.S. 37,094
Health care Hill-Rom Holdings Inc. Watch Pos Yes U.S. 475
Utility Hrvatska Elektroprivreda d.d. Positive Croatia 550
Chemicals, packaging, and environmental services Huntsman Corp. Positive U.S. 1,900
Consumer products JBS S.A. (J&F Investimentos S.A.) Positive Brazil 14,050
Automotive Lithia Motors Inc., Positive U.S. 1,750
Insurance Magellan Health Inc. Watch Pos U.S. 400
Metals, mining, and steel Minsur S.A. (Breca Mineria S.A.C. and Subsidiaries) Positive Peru 450
Media and entertainment Netflix Inc. Positive U.S. 15,438
Financial institutions New York Community Bancorp Inc., Positive U.S. 1,040
Consumer products Newell Brands Inc. Positive U.S. 7,878
Financial institutions Texas Capital Bancshares Inc., Positive U.S. 1,100
Capital goods The Weir Group PLC Positive U.K. 800
Automotive Volvo Car AB (Zhejiang Geely Holding Group Co., Ltd.) Positive Sweden 2,498
Metals, mining, and steel Yamana Gold Inc. Positive Canada 2,050
Metals, mining, and steel Zijin Mining Group Co. Ltd. Positive China 350
Data as of Sept. 30, 2021. 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. This debt may be rated above or below the issuer credit rating. 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. Source: S&P Global Ratings Research.

Appendix 1: Hypothetical Scenario Analysis Approach

This hypothetical scenario analysis includes parent firms in the U.S. and EMEA rated in the 'BBB' category and all qualifying debt in their organizational hierarchies, as well as the qualifying debt of subsidiaries rated in the 'BBB' category if their parents are assigned other ratings. Reported debt includes secured and unsecured bank loans, subordinated debt, medium-term notes, preferred stock, convertible debt, and drawdowns under medium-term note programs. It does not include commercial paper programs, shelf registrations, revolvers, or certificates of deposit.

The hypothetical risk weights for each rating level ('BBB+', 'BBB', and 'BBB-') approximate the relative long-term fallen angel rates in the U.S. and EMEA regions combined over a 12-month rolling horizon from 2010 through 2020 (see table 5).

The risk weights applied to the negative and positive outlooks and CreditWatch statuses represent estimates for fallen angel potential given current economic conditions--with far more fallen angel risk among companies rated 'BBB-' and on CreditWatch with negative implications, and essentially no fallen angel risk for companies rated 'BBB+' with positive outlooks. The risk weights applied to each rating level reflect the downgrade rates that could be expected for that rating level given the average annual fallen angel rates since 2010, adjusted for outlooks and CreditWatch statuses. We then multiplied the debt distribution by each corresponding risk weight in this scenario and summed the total. We used this to calculate a hypothetical downgraded debt amount over the next 12 months.

Table 5

Hypothetical Fallen Angel Scenario Risk Weights
Outlook/CreditWatch (%) BBB+ BBB BBB-
Positive outlook or CreditWatch 0.00 0.00 0.00
Stable outlook 0.09 0.62 4.21
Negative outlook 1.00 3.00 20.00
Negative CreditWatch 3.00 15.00 50.00
Average rate downgrade to speculative-grade (2010-2020)* 0.26 1.53 7.17
*Nonfinancial companies from U.S. & EMEA. Sources: S&P Global Ratings Research; S&P Global Market Intelligence's CreditPro®.

Table 6

Recent Global Nonfinancial Rating Transitions And Long-Term Averages (%)
2021 year-to-date*
From/to AAA AA+ AA AA- A+ A A- BBB+ BBB BBB- BB+ BB BB- B+ B B- CCC/C D NR
AAA 100.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
AA+ 0.00 100.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
AA 0.00 7.14 75.00 17.86 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
AA- 0.00 0.00 13.16 71.05 10.53 2.63 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 2.63
A+ 0.00 0.00 0.00 4.60 89.66 4.60 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1.15
A 0.00 0.00 0.00 0.00 2.16 88.95 6.47 1.08 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1.35
A- 0.00 0.00 0.00 0.00 0.00 0.94 88.92 8.27 0.62 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1.25
BBB+ 0.00 0.00 0.00 0.00 0.00 0.00 2.78 93.92 1.27 0.25 0.25 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1.52
BBB 0.00 0.00 0.00 0.00 0.00 0.00 0.00 2.38 90.15 4.98 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 2.49
BBB- 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 7.30 84.76 4.03 0.25 0.00 0.00 0.00 0.00 0.00 0.00 3.65
BB+ 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 6.56 88.12 2.84 0.35 0.00 0.00 0.00 0.00 0.00 2.13
BB 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 12.24 79.23 3.54 0.48 0.32 0.00 0.00 0.00 4.19
BB- 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.90 10.08 75.64 3.61 0.45 0.60 0.30 0.00 8.42
B+ 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1.38 12.81 72.87 5.92 0.00 1.10 0.28 5.65
B 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.15 0.07 0.66 6.33 80.21 4.19 0.44 0.00 7.95
B- 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.08 0.30 0.91 9.80 75.00 3.19 0.00 10.71
CCC/C 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.23 1.97 15.20 62.76 10.21 9.63
One-year average, 1981-2020
From/to AAA AA+ AA AA- A+ A A- BBB+ BBB BBB- BB+ BB BB- B+ B B- CCC/C D NR
AAA 87.05 3.71 3.92 0.70 0.28 0.28 0.28 0.00 0.00 0.00 0.00 0.07 0.07 0.00 0.00 0.00 0.00 0.00 3.64
AA+ 3.08 80.49 8.09 3.59 0.64 0.26 0.13 0.13 0.26 0.13 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 3.21
AA 0.40 1.24 82.10 7.01 2.35 1.24 0.34 0.50 0.10 0.10 0.07 0.03 0.03 0.03 0.00 0.03 0.00 0.00 4.43
AA- 0.00 0.07 3.57 78.49 9.86 2.71 0.63 0.30 0.20 0.17 0.07 0.00 0.00 0.03 0.17 0.00 0.00 0.00 3.74
A+ 0.00 0.04 0.48 3.55 78.68 9.17 2.85 0.76 0.31 0.08 0.10 0.08 0.02 0.13 0.06 0.00 0.00 0.06 3.61
A 0.05 0.02 0.23 0.32 4.06 79.65 6.85 2.99 1.04 0.27 0.13 0.15 0.11 0.13 0.00 0.00 0.01 0.01 3.98
A- 0.02 0.00 0.05 0.07 0.32 4.95 78.92 8.49 2.16 0.51 0.11 0.15 0.10 0.12 0.02 0.01 0.04 0.02 3.92
BBB+ 0.00 0.01 0.03 0.01 0.12 0.71 6.25 76.64 8.80 1.61 0.31 0.29 0.13 0.18 0.10 0.02 0.03 0.10 4.66
BBB 0.01 0.00 0.03 0.00 0.07 0.28 0.93 6.53 77.40 6.55 1.29 0.68 0.27 0.21 0.10 0.03 0.03 0.11 5.46
BBB- 0.01 0.00 0.01 0.05 0.06 0.11 0.26 1.10 8.63 73.52 5.59 2.21 0.95 0.34 0.26 0.16 0.23 0.18 6.35
BB+ 0.05 0.00 0.00 0.00 0.00 0.05 0.07 0.40 1.53 10.85 66.17 7.90 2.65 1.02 0.59 0.21 0.29 0.21 8.02
BB 0.00 0.00 0.03 0.00 0.00 0.05 0.05 0.13 0.42 1.81 9.17 65.60 9.01 2.55 1.07 0.40 0.42 0.49 8.79
BB- 0.00 0.00 0.00 0.01 0.01 0.01 0.05 0.09 0.23 0.30 1.49 9.59 63.21 9.05 3.15 0.80 0.76 1.01 10.25
B+ 0.00 0.01 0.00 0.03 0.00 0.03 0.06 0.05 0.05 0.08 0.28 1.28 7.64 62.71 9.74 2.63 1.89 1.98 11.56
B 0.00 0.00 0.01 0.00 0.00 0.02 0.04 0.01 0.05 0.01 0.09 0.21 0.98 6.88 61.17 10.41 4.28 3.21 12.62
B- 0.00 0.00 0.00 0.00 0.02 0.02 0.00 0.05 0.03 0.10 0.07 0.12 0.41 1.94 8.84 53.59 13.95 6.86 14.01
CCC/C 0.00 0.00 0.00 0.00 0.03 0.00 0.08 0.06 0.08 0.06 0.00 0.11 0.34 0.88 2.55 8.41 42.92 29.70 14.78
*Through Aug. 31. Sources: S&P Global Ratings Research and S&P Global Market Intelligence's CreditPro®.

Table 7

Recent U.S. Nonfinancial Rating Transitions And Long-Term Averages (%)
2021 year-to-date*
From/to AAA AA+ AA AA- A+ A A- BBB+ BBB BBB- BB+ BB BB- B+ B B- CCC/C D NR
AAA 100.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
AA+ 0.00 100.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
AA 0.00 0.00 33.33 66.67 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
AA- 0.00 0.00 7.14 78.57 7.14 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 7.14
A+ 0.00 0.00 0.00 5.71 88.57 2.86 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 2.86
A 0.00 0.00 0.00 0.00 3.82 80.25 12.74 2.55 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.64
A- 0.00 0.00 0.00 0.00 0.00 1.30 84.69 10.75 1.30 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1.95
BBB+ 0.00 0.00 0.00 0.00 0.00 0.00 1.21 96.37 0.60 0.60 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1.21
BBB 0.00 0.00 0.00 0.00 0.00 0.00 0.00 2.05 92.33 4.60 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1.02
BBB- 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 11.72 81.72 3.45 0.69 0.00 0.00 0.00 0.00 0.00 0.00 2.41
BB+ 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 8.44 87.76 2.53 0.84 0.00 0.00 0.00 0.00 0.00 0.42
BB 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 14.63 77.44 3.35 0.91 0.61 0.00 0.00 0.00 3.05
BB- 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 2.05 13.70 70.21 3.77 0.34 0.68 0.68 0.00 8.56
B+ 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.99 15.88 69.23 6.70 0.00 0.99 0.00 6.20
B 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.26 0.00 0.52 7.16 79.69 4.04 0.26 0.00 8.07
B- 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.22 0.99 9.61 76.35 2.43 0.00 10.39
CCC/C 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 2.42 19.37 59.96 7.64 10.61
One-year average, 1981-2020
From/to AAA AA+ AA AA- A+ A A- BBB+ BBB BBB- BB+ BB BB- B+ B B- CCC/C D NR
AAA 85.96 2.70 4.83 0.79 0.34 0.22 0.45 0.00 0.00 0.00 0.00 0.11 0.11 0.00 0.00 0.00 0.00 0.00 4.49
AA+ 2.95 82.05 5.68 4.32 0.68 0.23 0.00 0.00 0.45 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 3.64
AA 0.32 1.06 83.05 6.00 2.31 1.43 0.18 0.65 0.14 0.09 0.05 0.05 0.05 0.00 0.00 0.05 0.00 0.00 4.57
AA- 0.00 0.00 3.28 78.02 9.20 3.69 0.64 0.41 0.12 0.18 0.12 0.00 0.00 0.06 0.29 0.00 0.00 0.00 3.99
A+ 0.00 0.06 0.70 3.11 79.56 8.43 2.95 0.86 0.41 0.10 0.10 0.13 0.03 0.10 0.10 0.00 0.00 0.06 3.33
A 0.07 0.02 0.31 0.36 4.24 79.84 5.87 3.30 1.16 0.30 0.17 0.21 0.16 0.14 0.00 0.00 0.02 0.02 3.82
A- 0.04 0.00 0.07 0.11 0.39 5.64 77.57 8.36 2.82 0.54 0.13 0.15 0.09 0.15 0.00 0.02 0.07 0.04 3.80
BBB+ 0.00 0.02 0.06 0.02 0.17 0.96 6.70 75.34 9.02 2.00 0.35 0.35 0.15 0.24 0.15 0.04 0.04 0.11 4.29
BBB 0.01 0.00 0.03 0.00 0.08 0.43 1.28 6.69 77.08 6.01 1.42 0.81 0.35 0.29 0.14 0.01 0.04 0.17 5.16
BBB- 0.02 0.00 0.02 0.08 0.06 0.15 0.36 1.33 9.08 73.65 5.00 2.74 1.09 0.43 0.21 0.19 0.13 0.19 5.28
BB+ 0.09 0.00 0.00 0.00 0.00 0.09 0.12 0.42 2.27 10.74 65.87 7.48 3.11 1.32 0.72 0.21 0.27 0.24 7.06
BB 0.00 0.00 0.04 0.00 0.00 0.08 0.06 0.12 0.56 2.16 8.43 66.59 8.64 2.82 1.37 0.50 0.23 0.60 7.79
BB- 0.00 0.00 0.00 0.02 0.02 0.02 0.08 0.14 0.23 0.36 1.65 9.03 64.09 8.82 3.36 0.92 0.79 1.04 9.44
B+ 0.00 0.01 0.00 0.04 0.00 0.03 0.07 0.04 0.06 0.09 0.23 1.10 7.21 64.69 9.22 2.52 1.83 2.05 10.80
B 0.00 0.00 0.01 0.00 0.00 0.03 0.05 0.01 0.05 0.01 0.10 0.22 0.96 6.92 62.22 10.14 4.36 3.38 11.53
B- 0.00 0.00 0.00 0.00 0.02 0.02 0.00 0.07 0.02 0.12 0.09 0.09 0.38 1.98 8.34 55.17 13.89 7.28 12.50
CCC/C 0.00 0.00 0.00 0.00 0.04 0.00 0.12 0.08 0.08 0.08 0.00 0.12 0.36 1.07 2.79 7.28 44.01 30.36 13.61
*Through Aug. 31. Sourcea: S&P Global Ratings Research and S&P Global Market Intelligence's CreditPro®.

Table 8

Recent EMEA Nonfinancial Rating Transitions And Long-Term Averages (%)
2021 year-to-date*
From/to AAA AA+ AA AA- A+ A A- BBB+ BBB BBB- BB+ BB BB- B+ B B- CCC/C D NR
AAA 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
AA+ 0.00 100.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
AA 0.00 0.00 100.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
AA- 0.00 0.00 0.00 90.91 9.09 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
A+ 0.00 0.00 0.00 4.76 85.71 9.52 0.00 0.00 0.00 0.00 0.00 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 0.00 100.00 0.00 0.00 0.00 0.00 0.00 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 1.28 88.46 10.26 0.00 0.00 0.00 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 4.24 91.53 1.69 0.00 0.85 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1.69
BBB 0.00 0.00 0.00 0.00 0.00 0.00 0.00 3.07 91.57 4.60 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.77
BBB- 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 7.66 85.96 3.40 0.00 0.00 0.00 0.00 0.00 0.00 0.00 2.98
BB+ 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 8.82 84.71 1.18 0.00 0.00 0.00 0.00 0.00 0.00 5.29
BB 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 13.75 74.38 5.63 0.00 0.00 0.00 0.00 0.00 6.25
BB- 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 7.26 79.89 5.03 1.12 0.00 0.00 0.00 6.70
B+ 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 2.25 5.62 82.02 5.62 0.00 0.00 0.00 4.49
B 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.42 5.06 82.70 5.06 0.00 0.00 6.75
B- 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.63 0.95 10.09 75.08 5.68 0.00 7.57
CCC/C 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 8.70 72.28 12.50 6.52
One-year average, 1981-2020
From/To AAA AA+ AA AA- A+ A A- BBB+ BBB BBB- BB+ BB BB- B+ B B- CCC/C D NR
AAA 89.32 4.98 2.14 0.71 0.36 0.36 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 2.14
AA+ 0.00 77.53 12.92 3.93 0.00 0.56 0.56 0.56 0.00 0.56 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 3.37
AA 0.48 1.67 79.19 9.81 3.11 1.20 0.96 0.24 0.00 0.24 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 3.11
AA- 0.00 0.16 2.37 78.08 13.25 1.58 0.95 0.16 0.47 0.32 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 2.68
A+ 0.00 0.00 0.13 4.26 73.68 12.65 3.87 0.52 0.13 0.13 0.26 0.00 0.00 0.26 0.00 0.00 0.00 0.13 4.00
A 0.00 0.09 0.00 0.09 3.00 76.05 12.53 3.00 0.94 0.26 0.09 0.00 0.00 0.26 0.00 0.00 0.00 0.00 3.69
A- 0.00 0.00 0.06 0.00 0.40 3.79 79.65 9.95 1.64 0.79 0.17 0.06 0.06 0.06 0.06 0.00 0.00 0.00 3.34
BBB+ 0.00 0.00 0.00 0.00 0.00 0.48 5.67 77.52 9.81 1.22 0.32 0.42 0.21 0.16 0.00 0.00 0.05 0.11 4.03
BBB 0.00 0.00 0.05 0.00 0.10 0.05 0.31 7.11 76.89 8.31 1.41 0.42 0.10 0.10 0.10 0.10 0.00 0.00 4.91
BBB- 0.00 0.00 0.00 0.00 0.14 0.14 0.14 0.50 9.27 71.61 8.13 1.93 1.00 0.14 0.29 0.00 0.21 0.14 6.35
BB+ 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.38 0.57 12.13 65.88 9.86 2.09 0.85 0.38 0.00 0.09 0.09 7.68
BB 0.00 0.00 0.00 0.00 0.00 0.00 0.08 0.17 0.17 1.25 11.01 63.89 9.01 2.25 0.58 0.08 0.33 0.17 11.01
BB- 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.41 0.16 1.14 12.34 59.98 10.55 2.76 0.49 0.41 0.81 10.96
B+ 0.00 0.00 0.00 0.00 0.00 0.06 0.00 0.12 0.00 0.06 0.55 2.01 9.39 57.01 12.80 2.74 1.65 0.91 12.68
B 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.05 0.18 1.13 6.06 62.18 10.44 3.43 1.63 14.91
B- 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.10 0.00 0.00 0.00 0.51 0.82 10.35 53.28 14.75 4.82 15.37
CCC/C 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.20 0.00 0.00 0.00 0.00 0.39 1.37 11.18 41.76 25.88 19.22
*Through Aug. 31. Sources: S&P Global Ratings Research and S&P Global Market Intelligence's CreditPro®.

Table 9

Recent APAC Nonfinancial Rating Transitions And Long-Term Averages (%)
2021 year-to-date*
From/to AAA AA+ AA AA- A+ A A- BBB+ BBB BBB- BB+ BB BB- B+ B B- CCC/C D NR
AAA 100.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
AA+ 0.00 100.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
AA 0.00 13.33 86.67 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
AA- 0.00 0.00 36.36 45.45 9.09 9.09 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
A+ 0.00 0.00 0.00 3.57 96.43 0.00 0.00 0.00 0.00 0.00 0.00 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 1.75 91.23 3.51 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 3.51
A- 0.00 0.00 0.00 0.00 0.00 0.00 96.05 2.63 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1.32
BBB+ 0.00 0.00 0.00 0.00 0.00 0.00 3.85 91.03 2.56 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 2.56
BBB 0.00 0.00 0.00 0.00 0.00 0.00 0.00 2.31 84.97 3.47 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 9.25
BBB- 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 4.00 85.33 4.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 6.67
BB+ 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 92.11 5.26 0.00 0.00 0.00 0.00 0.00 0.00 2.63
BB 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 3.39 93.22 0.00 0.00 0.00 0.00 0.00 0.00 3.39
BB- 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 11.11 66.67 5.56 0.00 0.00 0.00 0.00 16.67
B+ 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 3.28 16.39 57.38 3.28 0.00 6.56 3.28 9.84
B 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 10.20 65.31 4.08 8.16 0.00 12.24
B- 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 5.26 55.26 5.26 0.00 34.21
CCC/C 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 11.43 40.00 28.57 20.00
One-year average, 1981-2020
From/to AAA AA+ AA AA- A+ A A- BBB+ BBB BBB- BB+ BB BB- B+ B B- CCC/C D NR
AAA 88.79 5.61 2.34 0.47 0.00 0.47 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 2.34
AA+ 6.62 80.15 9.56 1.47 0.74 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1.47
AA 0.28 1.70 79.83 9.66 1.70 0.28 0.57 0.00 0.00 0.00 0.00 0.00 0.00 0.28 0.00 0.00 0.00 0.00 5.68
AA- 0.00 0.16 5.76 80.59 7.89 1.15 0.16 0.16 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 4.11
A+ 0.00 0.00 0.00 5.03 80.70 7.55 1.26 0.42 0.14 0.00 0.00 0.00 0.00 0.14 0.00 0.00 0.00 0.00 4.76
A 0.00 0.00 0.00 0.33 5.35 81.55 5.35 1.42 0.33 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 5.68
A- 0.00 0.00 0.00 0.08 0.08 4.71 81.64 6.90 0.49 0.08 0.00 0.00 0.00 0.16 0.00 0.00 0.00 0.00 5.85
BBB+ 0.00 0.00 0.00 0.00 0.00 0.33 7.12 77.81 6.54 0.66 0.25 0.00 0.00 0.08 0.08 0.00 0.00 0.00 7.12
BBB 0.00 0.00 0.00 0.00 0.00 0.00 0.57 6.40 78.24 5.50 0.49 0.33 0.08 0.08 0.00 0.00 0.08 0.00 8.21
BBB- 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1.01 8.29 73.41 4.25 1.21 0.61 0.10 0.10 0.00 0.10 0.20 10.72
BB+ 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.17 0.17 10.29 67.75 4.80 1.54 0.34 0.17 0.34 0.69 0.34 13.38
BB 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.21 0.00 2.54 10.36 58.56 8.03 2.11 0.21 0.42 0.85 0.42 16.28
BB- 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.67 9.84 51.68 11.41 3.36 0.45 0.67 0.67 21.25
B+ 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.19 2.68 7.46 52.39 9.18 2.49 1.91 3.06 20.65
B 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.49 0.98 7.37 50.12 10.07 3.44 2.95 24.57
B- 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.45 0.00 3.14 8.07 43.50 10.76 6.28 27.80
CCC/C 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.69 0.00 0.00 1.39 7.64 38.89 30.56 20.83
*Through Aug. 31. Sources: S&P Global Ratings Research and S&P Global Market Intelligence's CreditPro®.

Table 10

Recent LatAm Nonfinancial Rating Transitions And Long-Term Averages (%)
2021 year-to-date*
From/to AAA AA+ AA AA- A+ A A- BBB+ BBB BBB- BB+ BB BB- B+ B B- CCC/C D NR
AAA 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 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 0.00 0.00 0.00 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 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
AA- 0.00 0.00 0.00 0.00 100.00 0.00 0.00 0.00 0.00 0.00 0.00 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 0.00 100.00 0.00 0.00 0.00 0.00 0.00 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 0.00 100.00 0.00 0.00 0.00 0.00 0.00 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 0.00 100.00 0.00 0.00 0.00 0.00 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 7.14 92.86 0.00 0.00 0.00 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 3.85 88.46 7.69 0.00 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 0.00 84.21 10.53 0.00 0.00 0.00 0.00 0.00 0.00 0.00 5.26
BB+ 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 3.39 89.83 6.78 0.00 0.00 0.00 0.00 0.00 0.00 0.00
BB 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 7.69 84.62 3.85 0.00 0.00 0.00 0.00 0.00 3.85
BB- 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 4.35 86.23 1.45 0.00 1.45 0.00 0.00 6.52
B+ 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 16.07 73.21 7.14 0.00 0.00 0.00 3.57
B 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 3.13 9.38 6.25 68.75 0.00 0.00 0.00 12.50
B- 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 5.88 0.00 0.00 35.29 58.82 0.00 0.00 0.00
CCC/C 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 2.94 2.94 73.53 17.65 2.94
One-year average, 1981-2020
From/to AAA AA+ AA AA- A+ A A- BBB+ BBB BBB- BB+ BB BB- B+ B B- CCC/C D NR
AAA 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 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 0.00 0.00 0.00 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 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
AA- 0.00 0.00 0.00 76.67 20.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 3.33
A+ 0.00 0.00 0.00 3.13 78.13 12.50 0.00 3.13 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 3.13
A 0.00 0.00 0.00 0.00 0.00 75.51 18.37 0.00 2.04 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 4.08
A- 0.00 0.00 0.00 0.00 0.00 4.00 76.00 10.67 2.00 1.33 0.00 2.67 0.00 0.00 0.67 0.00 0.00 0.00 2.67
BBB+ 0.00 0.00 0.00 0.00 0.35 0.00 4.55 80.42 9.09 1.75 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 3.85
BBB 0.00 0.00 0.00 0.00 0.00 0.00 0.23 4.99 77.10 11.34 1.36 0.91 0.45 0.00 0.00 0.23 0.00 0.00 3.40
BBB- 0.00 0.00 0.00 0.00 0.00 0.00 0.13 0.53 5.06 75.10 6.92 0.93 0.13 0.40 0.80 0.53 1.20 0.13 8.12
BB+ 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.39 11.24 63.51 11.24 2.37 0.59 0.99 0.59 0.39 0.20 8.48
BB 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.13 0.00 0.53 9.74 65.00 11.71 2.11 0.53 0.26 1.71 0.39 7.89
BB- 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.12 0.36 0.72 10.04 67.86 7.53 1.79 0.48 1.19 1.43 8.48
B+ 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.40 1.19 10.71 54.56 8.93 4.17 3.37 3.17 13.49
B 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.23 0.23 1.62 8.80 48.15 14.35 6.02 6.94 13.66
B- 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.27 0.00 0.27 0.27 3.80 11.41 42.39 14.13 7.34 20.11
CCC/C 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1.21 0.81 3.63 13.71 39.11 28.63 12.90
*Through Aug. 31. Sources: S&P Global Ratings Research and S&P Global Market Intelligence's CreditPro®.

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
Primary Credit Analysts:Barbara Castellano, Milan + 390272111253;
barbara.castellano@spglobal.com
Jeanne L Shoesmith, CFA, Chicago + 1 (312) 233 7026;
jeanne.shoesmith@spglobal.com
Credit Markets Research:Vincent R Conti, Singapore + 65 6216 1188;
vincent.conti@spglobal.com
Research Contributors:Lyndon Fernandes, CRISIL Global Analytical Center, an S&P affiliate, Mumbai
Lekha Prabhakar, CRISIL Global Analytical Center, an S&P affiliate, Mumbai

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