Greater Likelihood of More Global Fallen Angels
Fallen angels (an issuer whose credit rating falls to double-‘B’-plus and below from triple-‘B’-minus and above, hence making the move to the speculative-grade rating category from the investment-grade rating category) are flourishing under the same ‘modest’ and ‘uneven’ economic recovery that is causing rising stars to dwindle, Standard & Poor’s said.’Globally, the annual total number and dollar value of fallen angels this year will rival those of 2001, possibly continuing the six-year trend of increasing fallen angels. At present, Standard & Poor’s has identified 69 issuers around the globe that have fallen angel potential. This is six more than identified two months earlier,’ said Diane Vazza, Standard & Poor’s head of Global Fixed Income Research. In the near term, the potential number of fallen angels globally could remain high with Outlooks and CreditWatch implications on global corporate ratings 29% negative, 63% stable, 1% developing, and only 7% positive. The brokerage and aerospace & defense subsectors have the cloudiest forecasts with 56% and 52% of issuers within their subsector distributions, respectively, having either a negative Outlook or a CreditWatch with negative implications.