All articles tagged with #sandp global ratings
Companies sold a record volume of leveraged loans last month, but recovery rates for defaults have significantly dropped. Investors in newly issued first-lien debt in the US and Canada can now expect to recover less than 35% of their investment, compared to 72% from 2018-2022, highlighting increased risk in this debt market.
S&P Global Ratings has downgraded Israel's credit outlook from stable to negative, citing the risk that the ongoing conflict with Hamas could spread and have a more significant impact on the Israeli economy. The credit rating agency assumes that the conflict will remain centered in Gaza and last no more than three to six months. However, if the conflict widens, S&P warns that it could further downgrade Israel's credit ratings.
S&P Global Ratings has followed Moody's Investors Service in downgrading and dimming its outlook for several US banks, citing a challenging environment for lenders. S&P lowered grades for KeyCorp, Comerica Inc., Valley National Bancorp, UMB Financial Corp., and Associated Banc-Corp, while also lowering its outlook for River City Bank and S&T Bank. The rating agency highlighted the impact of higher interest rates and deposit moves on the industry, with many depositors shifting their funds into higher-interest-bearing accounts, increasing banks' funding costs. The decline in deposits has squeezed liquidity for many banks, while the value of their securities has fallen.
S&P Global Ratings has downgraded five regional US banks and signaled a negative outlook for others due to the challenging lending environment. The downgraded banks include KeyCorp, Comerica Inc., Valley National Bancorp, UMB Financial Corp., and Associated Banc-Corp. This follows similar downgrades by Moody's two weeks ago. Regional banks have been facing higher interest rates on deposits and struggling to prevent deposit outflows, impacting their profitability. S&P cited factors such as declining deposits and a high proportion of commercial and uninsured deposits as reasons for the downgrades.
SoftBank has criticised S&P Global Ratings after the agency downgraded the Japanese company's credit rating to "BB" from "BB+". SoftBank said it was "extremely regrettable" that its financial soundness was not properly assessed and that it would continue its dialogue with S&P. The ratings agency argued that SoftBank's Vision Funds have a high exposure to unlisted company shares, which are more volatile, as a result of selling Alibaba stock that are listed in both the US and Hong Kong.
As the US approaches its debt limit, credit-rating companies Moody's, Fitch Ratings, and S&P Global Ratings are holding steady on the country's top rating, assuming a deal will be struck to avoid default. However, repeated political tussles are eroding the stability and predictability that support Washington's status as the risk-free standard in world financial markets. While none of the raters have downgraded the US since S&P did so in 2011, the country's credit rating would likely suffer another blow if Congress can't reach an agreement in time.
First Republic Bank has been downgraded to 'junk' status by S&P Global Ratings due to concerns over further deposit flight that could hurt its profitability. The bank's deposit base is more concentrated than most large regional banks, with a portion above the FDIC's $250,000 threshold at risk of withdrawal. Fitch also downgraded the bank's debt rating.