Another measure of global credit quality plunged in the first quarter, as the ratio of downgrades-to-upgrades ratio soared to 3-to-1 from 2-to-1 in the previous quarter.

As recently as the 2007 second quarter, the number of upgrades had approximated the number of downgrades, according to a new report from Moody’s Investors Service.

Globally, the environment continues to be cautious, as Moody’s noted that there is currently a greater percentage of issuers on review for downgrades than for upgrades, and there are more issuers holding negative outlooks than positive ones. At the end of the first quarter, for example, 3.8 percent of rated issuers were on review for downgrade, compared with 1.8 percent on review for upgrade.

In addition, 13.1 percent of rated issuers were given negative outlooks, compared with 6.1 percent with positive outlooks.

Not surprisingly, speculative-grade issuers were more likely than investment-grade issuers to experience both downgrades and upgrades in the first quarter of 2008. Speculative-grade issuers were also much more likely than investment-grade issuers to hold negative outlooks.

In terms of negative outlooks, credit quality trends vary widely around the globe, Moody’s results showed. The worst region: North America, where three times as many U.S. and Canadian issuers have negative outlooks than have positive ones. In Latin America, the Middle East, and Africa, meanwhile, all have more issuers on review for upgrade than on review for downgrade.

For Asia Pacific (excluding Japan), negative outlooks outnumber positive outlooks. And for Japan, there are still more positive outlooks than negative outlooks, though the gap has narrowed, Moody’s noted.

Also, more European issuers are on review for downgrade than review for upgrade.

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