Credit Market Research

There were 11 upgrades last week, the same number as the previous week, while downgrades increased to 13. Rating actions were concentrated among speculative-grade issuers, although there were four investment-grade downgrades. Rating actions included one rising star, Atkinsrealis Group Inc.; and one fallen angel, Metro AG.

Negative outlook or CreditWatch changes nearly doubled the previous week’s total and exceeded positive ones for the first time since the end of May. Net bias (positive minus negative bias) declined across all regions and is below the level of three months ago.

There were two defaults last week, Oriflame Investment Holding PLC, a consumer products company due to a missed payment; and GPD Cos Parent Inc., a U.S.-based plastics distributor and service provider due to distressed exchange.

Downgrades increased 86% in May and outnumbered upgrades for the first time in five months, driven by speculative-grade rating activity.

The number of weakest links increased last month, driven by 28 additions, and despite a high number of removals (26).

Monthly defaults more than doubled in May to 19 from eight in April, 10 of which were first-time defaulters. We expect the global speculative-grade default rate to reach 3.75% by March 2026.

Forward-looking ratings performance indicators also signal a down shift in performance, with net bias (positive minus negative bias) recording its largest decline since September 2022.