Downgrades were more than twice the number of upgrades in December, and speculative-grade downgrades exceeded investment grade over 10 to 1. Inflation was a factor in over one-third of potential downgrades but also one-quarter of potential upgrades. The number of 'B-' and lower rated borrowers is now more than 50% higher than five years ago, and these issuers are particularly vulnerable to slowing economic growth and rising funding costs.