Global Corporate Credit Quality Continued to Worsen in Q1
Moody’s says the overall global credit quality for corporate issuers continued to worsen during the first quarter of 2009, with a downgrade rate of 13.8% that highlights the negative credit climate in the first part of the year.
During the first quarter of 2009, overall credit quality continued to worsen, with an upgrade-downgrade ratio of 0.04, or 4 upgrades for every 100 downgrades.
“This upgrade-downgrade rate is much lower than pre-economic crisis figures. For example, the
At the end of the first quarter of 2009, 9.7% of rated issuers were on review for downgrade, compared to 1.0% on review for upgrade. Similarly, a greater percentage of issuers held negative outlooks than positive ones, and the negative trends have been growing. At the end of the first quarter, 26.7% of rated issuers were given negative outlooks, compared to 2.7% with positive outlooks.”
At the end of the first quarter of 2009, 9.7% of rated issuers were on review for downgrade, compared to 1.0% on review for upgrade, Moody’s said. “Similarly, a greater percentage of issuers held negative outlooks than positive ones, and the negative trends have been growing. At the end of the first quarter, 26.7% of rated issuers were given negative outlooks, compared to 2.7% with positive outlooks.”
Regardless of the region, there are more issuers on review for downgrade than review for upgrade, said Moody’s. However, Europe, the Middle East, Africa and Asia Pacific have the largest disparity. Similar to last quarter, the U.S. and Canada, Europe and Middle East and Africa are the regions with the largest percentage of negative outlooks.
On a positive note however, the U.S. and Canada also have the highest percentage of positive outlooks and watches-for-upgrade.
The type of ratings actions and outlooks differed by industry: Finance, Securities and Leasing, Automotive and Hotels, Gaming and Leisure had the largest absolute number of downgrades. All of these industries also currently have many more issuers on review for downgrade than review for upgrade.
For details see Moody’s Rating Actions, Reviews and Outlooks: Quarterly Update — First Quarter 2009
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