Moody’s: Upgrades Lead Downgrades in 2010

December 27, 2010

Upgrades are significantly leading downgrades for this year, according to a report published by Moody’s Investors Service. Upgrades are certain to lead downgrades significantly for the year, despite tightening this quarter.

Moody’s notes that upgrades outpaced downgrades every quarter so far this year, but that so far in Q4, this rate has narrowed. In Q1, the rating agency downgraded 56 companies with debt totaling $10 billion but upgraded 101 companies with $146 billion in debt. So far this quarter, the agency downgraded 72 issuers with $37 billion in debt and upgraded 99 issuers with $130 billion in debt.

“Despite upgrades narrower lead over downgrades, we believe that the U.S. Economy will grow rapidly enough to lift rates of resource utilization, where the latter ought to firm credit quality by enough to further narrow credit spreads,” said John Lonski, Moody’s team managing director, in the report.

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