Moody’s: HY Ratings Say Double-Dip Unlikely

September 1, 2010

High yield ratings indicate that the likelihood of a double-dip recession is small, according to a report issued Wednesday by Moody’s Investors Service.

So far in the third quarter, Moody’s upgraded 70 companies and downgraded 42, at that pace, the Q3 number of downgrades should drop by 61% while upgrades post only a small dip of 2%.

“The current favorable distribution of high yield credit rating revisions argues against the nearness of a double dip,” wrote Moody’s chief economist John Lonski in the report. “The very same forces that slash the number of downgrades should lend buoyancy to the overall economy.”

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