Credit Cracks Widen
High-yield spreads spike, signaling investors are bracing for defaults and downgrades.
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We have been tracking Corporate defaults, downgrades, and how they morph into layoffs. You can read our latest, Corporate Red Flags to Pink Slips.
Downgrades outnumbered upgrades for the fifth consecutive week despite slower overall rating activity.
Leading the downgrades was chemicals, packaging, and environmental services with four, followed by financial institutions with three, and Japanese utilities with two. Upgrades included a sovereign, Guatemala, citing economic resilience.
There were two defaults last week: U.S.-based home decor retailer At Home Group Inc. was downgraded to ‘SD’ (selective default) due to a missed interest payment; and Brazil-based airline Azul S.A. filed for bankruptcy and was downgraded to ‘D’ (default).
