Credit Risk Levels for Corporates in Developed Markets at Lowest Level since 2008 says S&P Capital IQ in its February Credit Market Pulse Report Market Signals for North American public companies suggest low or no credit risk
NEW YORK and LONDON, Feb. 11, 2014 /PRNewswire/ -- Since the end of October 2013, credit risk levels for non-financial corporates* in North America, Western Europe and Asia Pacific (APAC) mature markets have, on the whole, declined and reached their lowest levels since the beginning of the financial crisis in 2008, says S&P Capital IQ in the February issue of its new, bi-monthly research publication, Credit Market Pulse. For the first time since 2008, the median probability of default (PD) for these developed markets is below 0.1%, the equivalent of an 'a-' credit score**, meaning that 50% of all corporates in these markets have a short-term credit risk assessment of 'a-' level or better. To view a copy of the current issue of Credit Market Pulse, please click here or to learn more visit www.spcapitaliq-credit.com/creditmarketpulse.
From a regional perspective, the current market view of credit risk in North America continues to be optimistic. "With a median PD of just 0.02%, which maps to an 'aa-' credit score, 50% of North American public companies* are considered to have very low or no credit risk in the short-term," highlights Marcel Heinrichs, Director, Market Development, S&P Capital IQ. "These results are aligned with a series of recently published economic indicators that the US economy is on a steady path to recovery."
"Western European mid- to large cap corporations* continue to show a higher average credit risk than their North American counterparts, and this is certainly due to the Eurozone crisis and the continuing tight economic conditions of the debt-burdened countries in European periphery," continues Silvina Aldeco-Martinez, Managing Director, Product & Market Development, S&P Capital IQ. "However, this difference in credit risk remains low, and is an indication that markets do not consider these factors as imminent risks to the overall credit health of the region or globally. Indeed, recent discussions at the 2014 World Economic Forum in Davos have shifted attention more towards the weakening conditions of emerging market countries, notably Brazil, Turkey, India and Indonesia."
Credit Market Pulse offers a broad overview of the health and credit trends within the global capital markets. At the core of the report is S&P Capital IQ's proprietary probability of default model, 'Market Signals', a unique analytical model which provides daily changing forward looking PDs and mapped credit scores of publicly listed companies based on a cutting-edge econometric framework.
This issue of Credit Market Pulse has three sections, providing different views of credit risk. These include the quarterly evolution of the median PD of companies aggregated in different geographical regions; monthly evolution of the credit risk for constituents of the S&P 500 equity index and its various industry sub-indices and, finally, PD tables of individual companies that merit special attention. Customized searches similar to those presented in the report can be run for interested media using the data in Credit Market Pulse.
To subscribe to Credit Market Pulse, visit www.spcapitaliq-credit.com/creditmarketpulse.
*Credit Market Pulse considers non-financial corporations with revenues above USD 500m.
** A credit score is a quantitative assessment of credit risk from S&P Capital IQ's suite of credit risk models. It is expressed in letter grades such as bbb+ following the rating scale by Standard & Poor's Ratings Services, however in lower case letters in order to differentiate it from a rating.
About S&P Capital IQ
S&P Capital IQ, a part of McGraw Hill Financial (NYSE: MHFI), is a leading provider of multi-asset class and real time data, research and analytics to institutional investors, investment and commercial banks, investment advisors and wealth managers, corporations and universities around the world. S&P Capital IQ provides a broad suite of capabilities designed to help track performance, generate alpha, and identify new trading and investment ideas, and perform risk analysis and mitigation strategies. Through leading desktop solutions such as the S&P Capital IQ, Global Credit Portal and MarketScope Advisor desktops; enterprise solutions such as S&P Capital IQ Valuations; and research offerings, including Leveraged Commentary & Data, Global Markets Intelligence, and company and funds research, S&P Capital IQ sharpens financial intelligence into the wisdom today's investors need. For more information visit: www.spcapitaliq.com.
S&P Capital IQ, as well as its affiliates, directors, officers shareholders, employees or agents (S&P Capital IQ) are not responsible for any errors or omissions (negligent or otherwise), regardless of the cause, for any results obtained from the use of the Content described herein, or for the security or maintenance of any data input by the user. The Content is provided on an "as is" basis. S&P Capital IQ and its affiliates DISCLAIM ANY AND ALL EXPRESS OR IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE, FREEDOM FROM BUGS, SOFTWARE ERRORS OR DEFECTS, THAT THE CONTENT'S FUNCTIONING WILL BE UNINTERRUPTED OR THAT THE CONTENT WILL OPERATE WITH ANY SOFTWARE OR HARDWARE CONFIGURATION. In no event shall S&P Parties be liable to any party for any direct, indirect, incidental, exemplary, compensatory, punitive, special or consequential damages, costs, expenses, legal fees, or losses (including, without limitation, lost income or lost profits and opportunity costs or losses caused by negligence) in connection with any use of the Content even if advised of the possibility of such damages.
S&P Capital IQ is analytically and editorially independent from S&P Ratings Services. PD Market Signals is an analytical tool but is not a credit rating. Neither PD Market Signals nor credit ratings should be considered to be investment advice. A credit rating from Standard & Poor's Ratings Services is an opinion of the rated organization's creditworthiness and involves both qualitative and quantitative characteristics. PD Scores are based on but differ significantly from Standard & Poor's Ratings Services criteria and do not include a qualitative assessment or opinion. PD Market Signal scores are represented by lowercase nomenclature to differentiate them from S&P Ratings Services credit ratings.
SOURCE S&P Capital IQ