London / 05.27.2020 10:46:22
S&P Global Ratings warned that the number of companies or countries at risk of a cut in their credit ratings rose to a record high due to the SARS-CoV-2 coronavirus pandemic, which causes the disease covid-19.
In an analysis, the rating agency reported that a total of 1,287 of the ratings of S&P They now contain a downward warning, either with ‘negative outlook’ in which a cut could occur in up to two years or a ‘CrediWatch with negative implications’ alert, meaning that the threat is almost imminent.
The figure is higher than 1,228 debt notes with these conditions detected during the financial crisis of 2009 and occurs despite the fact that in recent months the firm has applied some 700 credit rating cuts due to the economic effects of the pandemic.
“Nearly two-thirds of issuers face the possibility of a rating downgrade due to the unprecedented challenges of coronavirus-related containment measures,” S&P said in its analysis.
The media and entertainment firms, the automotive and the companies of transport they have the highest proportion of marks at risk of downgrade, the data indicated.
The Hotels and entertainment companies have the highest percentage of negative CreditWatch as part of total potential markdowns, at 74 percent compared to 35 percent for other media and entertainment companies, 49 percent in the automotive industry, and 43 percent in transportation.
A total of 17 countries have negative outlooks on their sovereign ratings, ranging from triple-A nations like Australia to Zambia, which is at risk of default, as are a third of all banks in emerging markets.
The number of possible “fallen angels” – companies or countries whose ratings could be downgraded to speculative investment grade – is also now at a record level.
There have already been 24 such cuts, including large global companies like Ford, Kraft Heinz, Renault, Delta Air Lines and Macy’s, which have been stripped of their investment grade notes.
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