S&P: Upgrades Outpaced Downgrades in Q2
July 14, 2010
There were more upgrades than downgrades in the second quarter of 2010, meaning that credit markets will likely move toward stability, according to a report published Tuesday by Standard & Poor’s.
S&P upgraded 124 issuers in the second quarter and downgraded 109. This brought the downgrade ratio to 47%, the same as the second quarter of 2007. The report noted that the decline in downgrades during the current recovery is faster than during the two previous recessions of 1990/91 and 2001.
Negative bias, the percentage of issuers with a negative outlook or on CreditWatch with negative implications, dropped to 21% in Q2 from its peak of 37% in April 2009.
“We expect the rebalancing of credit risk, as indicated by a continued slowdown in rating changes and a shift from both negative and positive bias to more stable outlooks, to continue as the economy recovers,” Diane Vazza, head of S&P’s global fixed income research, said in the report.
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