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S&P: Financials Top List of 2016 Fallen Angels (and ‘Potential’ Fallen Angels)

global fallen angels financials

Financial institutions – which were battered especially hard after Great Britain’s Brexit vote on Thursday – might find a relatively rough road ahead for the rest of 2016, in terms of credit downgrades.

According to S&P, a full 25% of ‘potential fallen angels’ globally – 17 of 68 – hail from the financial sector. Of that number, 10 are from the U.S.

‘Potential fallen angels’ are issuers rated BBB- with either negative outlooks or ratings on CreditWatch with negative implications.

“Negative outlooks and CreditWatch negative placements are good leading indicators of downgrades because they are strong predictors of rating actions in the aggregate and when broken out by rating category, region, or sector,” according to S&P. “Hence, the financial institutions sector may play a strong role in future downgrades.” – Tim Cross

The full Fallen Angel analysis is available to S&P Global Fixed Income Research subscribers here. It was written by Diane Vazza, Sudeep Kesh, and Gregg Moskowitz

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