Fixed Income IQ leverages extensive analytical intelligence and data from S&P Capital IQ to look at regional corporate credit markets. All three regional reports, North America, Latin America and Europe, are accessible to each other through links within each report. Market trends are established using indices and yield curves. Credit trends look at ratings, CDS and probability of default data. In addition, the report highlights trends in financial ratios and issuance data.
- Overall, credit markets were mixed – Anticipation of rate increases caused investors to shed investment grade debt while high yield posted positive returns for second quarter in a row.
- U.S. sovereign risk decreased as global market volatility in China and Europe strengthened the U.S. as a safe haven.
- Spreads increased for most sectors and investment grade – Markets re-priced risk upwards this quarter for all sectors and for investment grade debt. Only high yield debt saw spreads tighten from last quarter.
- Risk signals mixed this quarter - Median equity market-based probabilities of default improved on a quarterly basis while fundamental probabilities of default showed deterioration in all but one sector.
- Issuance continues to be healthy – Issuance increased in most ratings categories on a year-over-year basis with the biggest increase coming from the BBB spectrum, following a similar trend from last quarter.