North America Credit Markets Update - 3Q 2020 - S&P Global
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North America Credit
Markets Update – 3Q 2020
Nicole Serino, Associate – Credit Markets Research
nicole.serino@spglobal.com
Abhik Debnath, Lead Analyst – Research
abhik.debnath@spglobal.com
Sudeep Kesh, Head of Credit Markets Research
sudeep.kesh@spglobal.com
Yucheng Zheng, Associate – North America Credit Research
yucheng.zheng@spglobal.com
Evan Gunter, Director- Ratings Performance Analytics
evan.gunter@spglobal.com
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Highlights
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(Bps) Spreads By Rating Categories
– The U.S. corporate credit market
3,000 has largely stabilized. After credit
GFC Peak spreads widened in late March to
2,500 the widest seen since the Global
Beginning Financial Crisis, spreads have both
2,000 Of 2020 tightened and differentiated.
Investment-grade credits saw a
COVID
1,500
Peak
meaningful reduction in risk
premium after actions by the
1,000 Week Federal Reserve.
Average*
– Investment-grade spreads remain
500 As of Aug. 31 bps wider than the beginning of
31, 2020 the year (152 bps at present), after
0
C AAA AA A BBB BB B CCC US IG US SG reaching a peak of 335 bps on
March 24.
(bps) GFC Peak
– Speculative-grade spreads also
2,000 contracted considerably after
Beginning
Of 2020 widening to 991 bps on March 23,
1,500 before easing to 544 bps as of Aug.
COVID Peak
31. ‘CCC’ spreads (the riskiest
1,000
category), is at par with distressed
Week
500 levels i.e.1000 basis points above
Average*
treasury.
As of Aug.
0 31, 2020
US IG US SG
C
*Week Average is calculated from Aug. 27 to Aug. 31 spreads. Data as of Aug. 31, 2020. Source:
S&P Global Ratings Research, Thomson Reuters.
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Used with accent colors: by using Insert g Header & Footer g Enter / change text g Click Apply All.North America | Corporate Issuance
New Financial and NonFinancial Bond Issuance
($ Bil.) 2019, Investment-Grade 2019, Speculative-Grade
2020, Investment-Grade 2020, Speculative-Grade – Investment-grade issuance overtook
1,500
2019 year-to-date levels in late March
Fed Policy Actions
1,200
following the announcement from the
U.S. Federal Reserve on an economic
stimulus package.
900
– This was mainly driven by investment-
Issuance continues to grade issuance, which is now 70%
600
strengthen mid-2020 after
higher than the 2019 year-to-date
record high issuance from
300 March volume. Speculative-grade issuance,
although is still seeing more risk
0 aversion for the lowest rated issuers, is
l
marginally above its 2019 level on a
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year-to-date basis.
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($ Bil.)
North America New Bond Issuance YTD (Through August)
2,000
US - Overall
1,500 Financial
Nonfinancials
1,000
Investment-
Grade
500 Speculative-
Grade
0
C 2016 YTD 2017 YTD 2018 YTD 2019 YTD 2020 YTD
YTD figures through Aug. 31 for years from 2016 to 2020. Data including both Financials and Non-Financials. Source: S&P
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Used with accent colors: by using Insert g Header & Footer g Enter / change text g Click Apply All.Corporate Issuance| North America
North America Cumulative Corporate Bond Issuance
2009 2015 2016 2017 2018 2019 2020
($ Bil.)
1,800
1,500
1,200
900
600
300
0
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Data as of Aug. 31, 2020. Source: S&P Global Ratings, Thomson Financial. Note: Corporate data includes financial and
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Top 25 Deals Set To Mature Through Oct. 2020
Maturity S&P Issue - Issuance (US
Issue Date Issuer Country Sector Market Place Security Description Currency
Date Rating $ Million)
9/11/2013 9/15/2020 Verizon Communications Inc U.S. Telecommunications U.S. Public BBB+ 4.500% Global Notes due '20 USD 3994.8
9/14/2012 10/15/2020 Reynolds Group Holdings Inc U.S. Consumer Products EURO/144A B+ 5.750% Senior Notes due '20 USD 3250
3/22/2013 10/15/2020 HJ Heinz Co U.S. Consumer Products EURO/144A BB- 4.250% Sr Sec Bonds due '20 USD 3100
9/30/2015 10/15/2020 HP-Enterprise,Software Bus U.S. High Technology EURO/144A BBB Gtd Sr Notes due '20 USD 2999.16
10/14/2010 10/15/2020 JPMorgan Chase & Co U.S. Banks U.S. Public A+ 4.250% Global Bonds due '20 USD 2736.53
10/19/2015 10/26/2020 Citigroup Inc U.S. Banks U.S. Public A- 2.650% Global Bonds due '20 USD 2696.98
10/22/2015 10/29/2020 JPMorgan Chase & Co U.S. Banks U.S. Public A 2.550% Global Notes due '20 USD 2497.43
10/14/2015 10/19/2020 Bank of America Corp U.S. Banks U.S. Public A- 2.625% Global MTNs due '20 USD 2249.26
10/13/2017 10/20/2020 Citibank NA U.S. Banks U.S. Public A+ 2.125% Senior Notes due '20 USD 2099.27
10/18/2017 10/26/2020 Royal Bank Of Canada Canada Banks U.S. Public AA- 2.150% Sr Med Term Nts due '20 USD 1998.84
9/9/2015 9/1/2020 Gilead Sciences Inc U.S. Healthcare U.S. Public A- 2.550% Senior Notes due '20 USD 1996.4
9/13/2010 9/16/2020 General Electric Capital Corp U.S. Financial Institution U.S. Public AA+ 4.375% Global MTNs due '20 USD 1984.34
9/16/2010 9/23/2020 JPMorgan Chase & Co U.S. Banks Euro Public A+ 3.875% Medium-Term Nts due '20 EUR 1954.89
9/15/2010 10/15/2020 Energy Transfer Equity LP U.S. Utility U.S. Public BB- 7.500% Global Notes due '20 USD 1800
9/13/2013 10/1/2020 Tenet Healthcare Corp U.S. Healthcare EURO/144A B+ 6.000% Sr Secured Nts due '20 USD 1800
9/20/2012 10/15/2020 Valeant Pharms Intl Inc Canada Healthcare EURO/144A BB- 6.375% Sr Unsecurd Nts due '20 USD 1750
Media &
10/2/2018 10/1/2020 Comcast Corp U.S. U.S. Public A- 3.300% Gtd Global Nts due '20 USD 1749.51
Entertainment
9/6/2018 9/17/2020 Halfmoon Parent Inc U.S. Finance Company EURO/144A A- 3.200% Sr Unsecurd Nts due '20 USD 1748.62
10/13/2015 10/15/2020 Fidelity Natl Info Svcs Inc U.S. High Technology U.S. Public BBB 3.625% Global Notes due '20 USD 1747.71
10/18/2010 10/25/2020 Wal-Mart Stores Inc U.S. Retail/Restaurants U.S. Public AA 3.250% Global Notes due '20 USD 1743.33
4/14/2011 10/1/2020 Texas Competitive Electric U.S. Utility EURO/144A CCC 11.500% Sr Secured Nts due '20 USD 1737.66
8/9/2010 9/15/2020 Ally Financial Inc U.S. Financial Institution EURO/144A B 7.500% Senior Notes due '20 USD 1734.53
9/23/2013 10/15/2020 Denali Inc U.S. Capital Goods EURO/144A BB+ 5.625% Notes due '20 USD 1500
10/23/2013 10/15/2020 SanDisk Corp U.S. High Technology U.S. Private NR 0.500% Cvt Senior Nts due '20 USD 1500
10/23/2015 10/30/2020 Royal Bank Of Canada Canada Banks U.S. Public AA- 2.350% Global MTNs due '20 USD 1499.3
Data as of Aug. 31, 2020 and excludes Sovereign. Red means speculative-grade rating , blue means investment-grade
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rating, and grey means NR (not rated). Data is for foreign currency only without perpetuals. Source: S&P Global Ratings
Research.
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Used with accent colors: by using Insert g Header & Footer g Enter / change text g Click Apply All.2020 Downgrades/Upgrades| Top 20 By Debt Amount (YTD)
Rating Debt Amount
Rating Date Issuer Country Sector Rating To Action Type
From (US $ Mil)
7/22/2020 Wells Fargo & Co. U.S. Bank BBB+ A- Downgrade 215064
3/25/2020 Ford Motor Co.* U.S. Automotive BB+ BBB- Downgrade 113862
5/8/2020 AbbVie Inc. U.S. Health Care BBB+ A- Downgrade 75619
6/19/2020 Oracle Corp. U.S. High Technology A A+ Downgrade 71249
4/23/2020 Walt Disney Company (The) U.S. Media & Entertainment A- A Downgrade 62702
3/25/2020 Occidental Petroleum Corp.* U.S. Oil & Gas Exploration & Production BB+ BBB Downgrade 43913
4/3/2020 Raytheon Technologies Corp U.S. Aerospace & Defense A- BBB+ Upgrade 43294
4/15/2020 Finastra Ltd. Cayman Islands High Technology CCC+ B- Downgrade 36029
2/14/2020 Kraft Heinz Company (The)* U.S. Consumer Products BB+ BBB- Downgrade 31539
2/5/2020 Merck & Co. Inc. U.S. Health Care AA- AA Downgrade 27460
3/16/2020 Exxon Mobil Corp. U.S. Integrated Oil & Gas AA AA+ Downgrade 24000
4/1/2020 Sprint Corp. (SoftBank Group Corp.) U.S. Telecommunications BB B Upgrade 20780
8/21/2020 Mediacom Communications Corp.# U.S. Telecommunications BBB BB+ Upgrade 20700
3/16/2020 Boeing Co. U.S. Aerospace & Defense BBB A- Downgrade 20698
5/8/2020 United Parcel Service Inc. U.S. Transportation A- A Downgrade 20694
4/8/2020 Hilton Worldwide Holdings Inc. U.S. Media & Entertainment BB BB+ Downgrade 19244
3/26/2020 Clarios Global LP Canada Automotive B B+ Downgrade 19028
7/28/2020 Netflix Inc U.S. Media & Entertainment BB BB- Upgrade 15914
2/24/2020 3M Co. U.S. Capital Goods A+ AA- Downgrade 14603
6/19/2020 Chesapeake Energy Corp. U.S. Oil & Gas Exploration & Production D CC Downgrade 14580
Data as of Aug. 31 2020, exclude Sovereign, and includes only latest rating changes. Red means speculative-grade rating and
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downgraded from investment grade to speculative grade. # Indicates Rising Star defined as an issuer upgraded to investment
grade from speculative grade.
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Summary
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Debt Amount (YTD)
Debt Amount
Rating Date Issuer Country Sector Rating To Rating From
(US $ Mil)
4/15/2020 Finastra Ltd. Cayman Islands High Technology CCC+ B- $36,029
3/24/2020 Bombardier Inc. Canada Aerospace & Defense CCC+ B- $9,287
4/17/2020 First Quantum Minerals Ltd Canada Metals, Mining & Steel CCC+ B- $6,000
7/21/2020 Clear Channel Outdoor Holdings Inc. U.S. Media & Entertainment CCC+ B- $5,835
4/27/2020 Hertz Global Holdings Inc. U.S. Transportation CCC- B- $5,050
5/14/2020 Nabors Industries Ltd Bermuda Oil & Gas Exploration & Production CCC+ B- $3,725
4/10/2020 GTT Communications, Inc. U.S. Telecommunications CCC+ B- $3,415
4/8/2020 Advantage Solutions Inc. U.S. Consumer Products CCC+ B- $3,345
4/8/2020 Varsity Brands Holding Co Inc. U.S. Consumer Products CCC+ B- $2,800
3/27/2020 CDS Group Canada Media & Entertainment CCC- B- $2,745
9/4/2020 Cengage Learning Holdings II Inc. U.S. Media & Entertainment CCC+ B- $2,580
4/30/2020 SM Energy Company U.S. Oil & Gas Exploration & Production CC B- $2,300
9/4/2020 McGraw-Hill Education, Inc. U.S. Media & Entertainment CCC+ B- $2,125
Aveanna Healthcare LLC (Aveanna
1/3/2020 Healthcare Holdings Inc.) U.S. Health Care CCC+ B- $2,091
Wesco Aircraft Holdings Inc. (Wolverine
8/19/2020 Intermediate Holding Corp.) U.S. Aerospace & Defense CCC+ B- $2,075
Chemicals, Packaging & Environmental
4/23/2020 FXI Holdings, Inc. U.S. Services CCC+ B- $2,075
4/8/2020 Helix Acquisition Holdings, Inc. U.S. Capital Goods CCC+ B- $2,055
4/17/2020 Life Time, Inc. U.S. Media & Entertainment CCC+ B- $1,984
6/12/2020 AVSC Holding Corp. U.S. Media & Entertainment CCC B- $1,980
4/23/2020 Syniverse Holdings, Inc. U.S. Telecommunications CCC+ B- $1,922
Debt volume includes subsidiaries. Note: Red means speculative-grade rating. Red means speculative-grade rating. Data as of
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Used with accent colors: by using Insert g Header & Footer g Enter / change text g Click Apply All.North America | COVID-19 / Oil-Related Rating Actions
COVID-19 / Oil Price Rating Actions By Month
Downgrade Downgrade + CW Change OL Change CreditWatch Negative
450
400
350
300
250
200
150
100
50
0
February March April May June July August
– The number of rating actions, including downgrades, have moderated since the peak in March (308) and April (387).
The number dropped significantly in August, to 35.
– The composition of rating actions has also changed since the beginning of the pandemic. Downgrades now account
for the majority of negative rating actions. The proportion rose to 69% of total rating actions in August from 54% in
April. The majority of rating actions from June to August were downgrades, resolving the CreditWatch negative and
negative outlook placements in the first and second quarters.
Note: Data includes Sovereign. Data from Feb. 3, 2020 to Aug. 31, 2020. Source: S&P Global Ratings.
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The Energy Sector Has Led Downgrades Since February As
Issuers Continue To Feel The Effects Of Continued Weaker Oil Prices
COVID-19 / Oil Price Rating Actions By Sector
Downgrades Outlook / CreditWatch Revisions
100
90
80
70
60
50
40
30
20
10
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Note: Data includes Sovereign. Data from Feb. 3, 2020 to Aug. 31, 2020. Source: S&P Global Ratings.
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About 73% Of The North American Nonfinancial Corporates Are Rated Speculative-
Grade, Compared With 32% Of Financial Services
AAA AA A BBB BB B CCC & Lower
0 50 100 150 200 250 300
Sovereign
Aerospace & Defense
Automotive
Bank
Transportation
Metals, Mining & Steel
Telecommunications
Forest
NonBank Financial Institutions
Oil & Gas
Retail/Restaurants
CP&ES
Home/Real Estate
Insurance
Capital Goods
Health care
Utility
High Technology
Consumer Products
Media & Entertainment
Data as of Aug. 31, 2020. Source: S&P Global Ratings.
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By Sector
Negative CreditWatch% Negative Outlook%
80% – In North America,
downgrade potential
70% remains high as COVID-19
impacts on business and
60% economies remains high.
– By sector, oil and gas still
50% holds the largest percent of
issuers with negative
40%
outlooks, while the auto,
media, lodging, and health
30%
care sectors have the largest
percentage on CreditWatch
20%
negative.
10% – Globally, potential
downgrades reached their
0% all-time high in July at 1,365,
above their previous record of
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decreased in August to 1,349.
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Data as of Aug. 31, 2020 and exclude sovereign. Media and entertainment sector includes leisure and lodging.
ow the line Source : S&P Global Ratings Research.
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Used with accent colors: by using Insert g Header & Footer g Enter / change text g Click Apply All.North America | Downgrade Potential By Sector
Automotive, Oil and Gas, Media and Lodging Lead Downgrade Potential In North America
Current Negative Bias (June 16, 2020) 5-Year Averages
Automotive (40) 75% – Echoing global trends,
18%
Oil & Gas (73) 75% North American sectors
37%
Media/entert (162) 61% including auto, oil and gas
22%
57%
and media, lodging have
Retail (62) 29%
55%
shown the highest
Capital goods (76) 21% downgrade potential.
Consumer products (121) 50%
25%
CP&ES (55) 47% These sectors have seen:
19%
Aerospace/defense (22) 19%
45% – Particularly intense revenue
Transportation (29) 15%
45% pressure (auto, oil and gas
Forest (31) 11%
41% and lodging, as well as
Financial institutions (60) 21%
39% retail);
Metals/mining/steel (25) 38% – Structural dislocation in the
22%
Health care (55) 18%
37% auto sector before the
Telecommunications (21) 21%
31% pandemic; and
Utility (40) 24%
16% – Deleterious effects that a
19%
High technology (35) 13% halt on travel has placed on
17%
Insurance (22) 9% airlines.
Home/RE (21) 17%
10%
0% 20% 40% 60% 80%
Data as of Aug. 31, 2020 and include sectors with more than five issuers only; excludes Sovereign. Source : S&P Global Ratings
Research.
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Identifying Downgrade Potential Across Sectors - North America
80%
Automotive
Oil & Gas
70%
Media & Entertainment
60%
Capital Goods
Retail/Restaurants
Current negative bias (%)
Consumer Products
50%
Chemicals, Packaging & Environmental Services Transportation
Aerospace & Defense Forest Products & Building Materials
40%
Financial Institutions Metals, Mining & Steel
Health Care
30% Telecommunications
Utility
20% Insurance
Homebuilders/Real Estate
Co. High Technology
10%
Sovereign
0%
0% 5% 10% 15% 20% 25% 30%
Long-term negative bias (%)
Media and entertainment sector includes issuers in Leisure and lodging businesses. Long-term bias calculates average
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Used with accent colors: by using Insert g Header & Footer g Enter / change text g Click Apply All.Ratings Action | Fallen Angels and Potential Fallen Angels
Fallen Angels Average Potential Fallen Angel
50
45
40 - The number of “fallen angels” in
35 North America has reached 19,
30
higher than the year-end tallies since
25
20
2016.
15 – The average number of potential
10
fallen angels peaks at an all-time
5
0
high level, surpassing 2009 levels.
07 008 009 010 011 012 013 014 015 016 017 018 019 20*
The financial sector continues to lead
C 20 2 2 2 2 2 2 2 2 2 2 2 2 20 potential fallen angels in North
America, reflecting exposure to their
Potential Fallen Angels Count (Left) Debt Amount Affected ($ Bil.)
weakened clients.
12 100
10 80 – For more information, see “'BBB'
8
60 Pulse: The Potential Fallen Angels
6
4
40 Total Starts To Decline From Record
2 20 Highs,” published Aug. 26, 2020.
0 0
ee
l er i ve ES ogy li ty est ds tai l ion RE cts er t gas n s se am
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an A ut i
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* Data as of Aug. 31, 2020. Source: S&P Global Ratings.
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Rated debt amount
Date Issuer To From Sector Country
($ Mil.)
5/5/2005 General Motors Corp. BB BBB- Automotive U.S. $291,800
3/25/2020 Ford Motor Co. BB+ BBB- Automotive U.S. $113,862
9/15/2008 Lehman Brothers Holdings Inc. SD A Financial Institutions U.S. $79,455
3/25/2020 Occidental Petroleum Corp. BB+ BBB Oil & Gas U.S. $43,913
6/12/2009 CIT Group, Inc. BB- BBB- Financial Institutions U.S. $38,191
2/14/2020 Kraft Heinz Company (The) BB+ BBB- Consumer Products U.S. $31,539
5/10/2002 WorldCom Inc. BB BBB Telecommunications U.S. $30,000
9/15/2008 Washington Mutual, Inc. BB- BBB- Financial Institutions U.S. $29,803
9/7/2016 EMC Corp. BB+ A High Technology U.S. $27,125
5/2/2008 Countrywide Financial Corp. BB+ BBB+ Financial Institutions U.S. $26,360
2/12/2016 Freeport-McMoRan Inc. BB BBB- Metals, Mining & Steel U.S. $25,812
4/1/2011 CenturyLink, Inc. BB BBB- Telecommunications U.S. $21,644
12/2/2002 El Paso Corp. BB BBB Utility U.S. $21,171
2/7/1991 Chrysler Corp. BB+ BBB- Automotive U.S. $20,600
5/1/2008 Sprint Nextel Corp. BB BBB- Telecommunications U.S. $19,585
4/30/2014 Navient Inc. BB BBB- Financial Institutions U.S. $18,846
1/7/2019 PG&E Corp. B BBB- Utility U.S. $17,525
8/3/2004 AT&T Corp. BB+ BBB Telecommunications U.S. $17,010
6/16/2014 Williams Companies Inc. (The) BB+ BBB Utility U.S. $16,821
11/1/2007 Residential Capital, LLC BB+ BBB- Financial Institutions U.S. $16,632
Data as of Aug. 31, 2020. Red means speculative-grade rating and blue means investment-grade rating. Source: S&P Global
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Used with accent colors: by using Insert g Header & Footer g Enter / change text g Click Apply All.Ratings Action| Weakest Links and Default Rates
North America Weakest Links Rise Near Record Highs, Pointing To
Higher Likely Default Rates To Come
– North America has seen the
Weakest Links Counts (Left) number of weakest fall since
Weakest Links Share Of Speculative-Grade Population (Right) June but remains well above
North America 12 Month Trailing Speculative -Grade Default Rate (Right) pre-crisis levels (27% of the
500 30% speculative-grade population).
Weakest links are issuers rated
450
‘B-’ and below on negative
25%
400 outlook or CreditWatch negative;
they typically default at a rate 8x
350
20% that of broader speculative-
300 grade issuers.
250 15% – Default rates are rising in the
U.S. and Canada as credit quality
200
deteriorates at the lower-end of
10% the rating spectrum.
150
100 – For more information, see “More
5% Than One-Quarter Of
50 Speculative-Grade Issuers Are
0 0%
Weakest Links,” published May
14, 2020.
Au 07
Au 08
Au 09
Au 10
Au 11
Au 12
Au 13
Au 14
Au 15
Au 16
Au 17
Au 18
Au 19
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
g-
g-
g-
g-
g-
g-
g-
g-
g-
g-
g-
g-
g-
g-
Au
ow the line Default Rates as of May 2020. Weakest links and speculative-grade data as of Aug. 31, 2020. Source: S&P Global Ratings
Research and S&P Global Market Intelligence’s CreditPro®.
18
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Used with accent colors: by using Insert g Header & Footer g Enter / change text g Click Apply All.Ratings Action| Corporate Defaults By Reason & Default
Rate Trend
Confidential Distressed Exchanges / Restructuring Default Tally (Left)
Regulatory Intervention Bankruptcy-Related
North America 12 Month Trailing Speculative -Grade Default Rate
Missed principal/interest payments (Right)
100% 250 14%
90%
12%
80% 200
10%
70%
60% 150
8%
50%
6%
100
40%
30% 4%
50
20% 2%
10%
0 0%
0%
2013 2014 2015 2016 2017 2018 2019 2020*
05
06
07
08
09
10
11
12
13
14
15
16
17
18
20 9
*
20
1
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
C
– The U.S. currently leads the corporate default tally with 106 defaults, 65% of the global total.
– S&P Global Ratings Research expects the U.S. trailing-12-month speculative-grade corporate default
rate to increase to 12.5% by March 2021 from 3.5% as of March 2020.
– For more information, see “Global Corporate Defaults Pick Up After Slowing In August,” published Sept.
11, 2020.
* Default tally data as of Aug. 31, 2020. Default Rates as of July 2020. Source: S&P Global Ratings and S&P Global Market
ow the line Intelligence’s CreditPro®.
19
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Used with accent colors: by using Insert g Header & Footer g Enter / change text g Click Apply All.Ratings Transitions | Transitions Rates
January 2020 to July 2020 Transitions
Rating BBB- BB+ BB BB- B+ B B- CCC/C D
BBB- 88.0 3.0 2.0 0.5 1.5 0.0 0.0 0.0 0.0
BB+ 1.2 74.8 12.3 6.1 0.6 0.0 0.0 0.0 0.6
BB 0.5 1.9 68.4 13.2 9.4 1.4 0.9 0.0 0.0 – One-year ratings transitions
BB- 0.0 0.0 4.6 63.0 18.3 5.5 0.9 2.3 1.8 are higher than their
B+ 0.0 0.0 0.0 2.8 52.4 23.0 8.3 4.4 0.8
B 0.0 0.0 0.0 0.0 2.0 57.6 22.3 9.2 1.3
historical averages and are
B- 0.0 0.0 0.0 0.0 0.5 1.4 61.5 26.4 3.9 highest at the lower-end of
CCC/C 0.0 0.0 0.0 0.0 0.0 0.0 0.6 51.9 39.9 the ratings spectrum.
July 2019 to July 2020 Transitions
– This is particularly visible in
Rating BBB- BB+ BB BB- B+ B B- CCC/C D
one-year transition rates
BBB- 77.6 3.4 3.9 0.5 2.0 0.0 0.5 0.0 0.5
BB+ 5.2 64.2 13.3 6.4 2.3 0.6 1.2 0.0 0.0 from ‘B’ to ‘B-’ , which are
BB 0.5 4.9 63.1 13.6 10.7 1.0 0.0 1.0 0.5 22.8% compared to its long-
BB- 0.0 0.0 7.4 55.0 16.6 7.0 2.6 2.6 1.7 term average of 9.3%.
B+ 0.0 0.0 0.0 4.1 42.0 23.0 8.9 5.9 2.6
B 0.0 0.0 0.0 0.0 2.8 48.4 22.8 12.2 2.6
B- 0.0 0.0 0.0 0.0 0.5 2.2 55.2 24.3 4.9
CCC/C 0.0 0.0 0.0 0.0 0.0 0.0 2.7 36.7 46.0
One Year Transitions Since 1981
Rating BBB- BB+ BB BB- B+ B B- CCC/C D
BBB- 73.4 4.8 2.3 1.1 0.5 0.2 0.2 0.2 0.3
BB+ 10.8 66.3 6.4 2.9 1.1 0.7 0.2 0.4 0.4
BB 2.4 8.6 66.3 8.3 2.5 1.3 0.4 0.4 0.6
BB- 0.4 2.0 9.0 63.9 8.3 3.4 1.0 0.8 0.9
B+ 0.1 0.3 1.2 7.3 64.9 8.9 2.4 1.8 2.0
B 0.0 0.1 0.2 1.0 7.1 62.8 9.3 4.2 3.5
B- 0.1 0.1 0.1 0.5 2.1 9.2 55.0 12.6 7.3
CCC/C 0.1 0.0 0.2 0.4 1.1 3.0 7.6 43.8 29.3
ow the line Red covers the downward transitions. Transition Rates as of July 2020. Source: S&P Global Market Intelligence’s CreditPro®.
20
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Used with accent colors: by using Insert g Header & Footer g Enter / change text g Click Apply All.U.S. Nonfinancials | $4.2 Trillion In Debt Matures
Through 2025
U.S. Nonfinancial Corporate Maturity Wall
(Bil. $) As of 7/1/2019 As of 1/1/2020 As of 7/1/2020 – Maturities now peak in 2025,
1000.0 with $948 billion scheduled to
mature.
900.0
– Nonfinancial companies
800.0
refinanced, paid down, or
700.0 otherwise reduced 9% of debt
maturing in second half 2020-
600.0
2023.
500.0
– New issuance helped lift 2025
400.0 maturities by $203 billion.
300.0
200.0
100.0
0.0
2020.2H 2021 2022 2023 2024 2025
Note: Includes bonds, loans, and revolving credit facilities that are rated by S&P Global Ratings on the respective report date.
ow the line Foreign currencies are converted to USD on the respective report period date. Source: S&P Global Ratings Research.
21
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Used with accent colors: by using Insert g Header & Footer g Enter / change text g Click Apply All.U.S. Nonfinancials | $1.87 Trillion In Speculative-
Grade Corporate Debt Matures Through 2025
U.S. Speculative-Grade Nonfinancial Corporate Maturity Wall
(Bil. $) – Nonfinancial companies
As of 7/1/2019 As of 1/1/2020 As of 7/1/2020
600.0
refinanced, paid down, or
otherwise reduced 9% of
speculative-grade debt
500.0 maturing in second half 2020-
2022.
400.0 – Maturities now peak in 2025,
with $512 billion scheduled to
300.0 mature.
– New issuance helped lift 2025
200.0 maturities by 22% (or $93
billion).
100.0
0.0
2020.2H 2021 2022 2023 2024 2025
Note: Includes bonds, loans, and revolving credit facilities that are rated by S&P Global Ratings on the respective report date.
ow the line Foreign currencies are converted to USD on the respective report period date. Source: S&P Global Ratings Research.
22
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Used with accent colors: by using Insert g Header & Footer g Enter / change text g Click Apply All.U.S. Financial Services | $1.25 Trillion Matures
Through 2025
U.S. Financial Services Maturity Wall
(Bil. $)
As of 7/1/2019 As of 1/1/20 As of 7/1/2020 – Maturities now peak in 2023,
300 with $249 billion scheduled to
mature.
250 – Financial services lowered the
amount of debt maturing in
200 second half 2020-2022 by 4%.
– With the new issuance,
150 maturities in 2023-2025 have
risen by 12%.
100
50
0
2020.2H 2021 2022 2023 2024 2025
Note: Includes bonds, loans, and revolving credit facilities that are rated by S&P Global Ratings on the respective report date.
ow the line Foreign currencies are converted to USD on the respective report period date. Source: S&P Global Ratings Research.
23
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Used with accent colors: by using Insert g Header & Footer g Enter / change text g Click Apply All.Related Research
– COVID-19- And Oil Price-Related Public Rating Actions On Corporations, Sovereigns, And Project
Finance To Date, Sep. 29, 2020
– North America: Potholes On The Road To Recovery , Sep. 29, 2020
– 'BBB' Pulse: Potential Fallen Angels Remain Stable In August, With Five Outlook Revisions To Stable
And Just One Downgrade , Sep. 28, 2020
– Oil And Gas Defaults Continue To Climb, Sep. 25, 2020
– Risky Credits: The Number Of 'CCC' Category Ratings Stabilizes, Sep. 21, 2020
– The Still-High Weakest Links Tally Contracts As Defaults Rise, Aug. 18, 2020
– U.S. Refinancing: Maturities Climb Through 2025 After Record Issuance In First-Half 2020, Aug. 11,
2020
– Global Financing Conditions: Bond Issuance Is Expected To Finish 2020 Up 6% After A Strong Second
Quarter, July 27, 2020
– Global Corporate Debt Market: State Of Play In 2020, June 25, 2020
ow the line
24
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