Credit Market Research

There were two new rising stars, Italy-based telecommunications company TIM SpA and Denmark-based health care company Genmab AS, we upgraded both to 'BBB-'.

Downgrades eased to seven but included two large downgrades by debt volume; we downgraded Salesforce Inc. to 'A' and BMW AG to 'A-'.

We recorded three defaults last week, each in a different sector. We downgraded Paraguay-based Ueno Bank S.A. to 'D' from 'BB' following central bank intervention. The year-to-date defaults totaled 91, below the 100 observed for the same period in 2025.

Upgrades exceeded downgrades for a fourth consecutive month in September, and net bias reached its highest level in more than four years. However, the positive ratings momentum remained concentrated in a few sectors, led by financial institutions.

Distressed exchanges continued to dominate default activity, but repeat defaulters accounted for 31% of year-to-date defaults through Sept. 30, signaling rising liquidity pressure.

Weakest links fell to their lowest in four years as improving outlooks helped removals outpace additions. However, additions from high technology reflected rising refinancing and capital-structure risks.

Structured finance downgrades fell for a second consecutive month and upgrades outpaced downgrades across all major asset classes except CMBS, which has gone six months without upgrades.