Rating agencies reportedly expect a greater share of the lowest-quality investment-grade bonds to be downgraded than to be upgraded.
That’s the first time this has been the case in this part of the U.S. corporate bond market since the end of 2021, the Financial Times (FT) reported Monday (May 27).
The proportion of these bonds that is on “negative watch” is at 5.7%, while the percentage that is on “positive watch” is at 5.3%, according to the report.
In early January, those figures were at 2.9% and 7.9%, respectively, the report said.
The report attributes this shift together “negative watch” to challenges facing certain segments of the American economy as they deal with a combination of slower economic growth and high borrowing costs.
The number of big companies with a large amount of borrowing has also contributed to the change, according to the report.
The shift marks a reversal from last…
