FAST FIVE: The "Fallen Angel" Avalanche Arrives: S&P Downgrading Companies At Fastest Pace On Record
we learned that – true to its word – S&P was slashing and burning corporate ratings at the fastest pace on record as it sturggled to keep up with the cratering US economy and cash flows.
As BofA calculates, net downgrades (downgrades less upgrades) so far in March have totaled $284BN, with the Energy sector leading ($85bn, or 30% of the total), followed by Autos following Wednesday's downgrade by both Moody's and S&P ($81bn) and Aerospace/Defense ($33bn). In terms of actual rating events, S&P has already done 565 downgrades this quarter, up from 351 in 4Q and 281 in 1Q last year, per Bloomberg.
Fitch has done 192 downgrades this quarter, its most since 2012.
As a result the current two-week pace of downgrades is approaching the fastest on record going back to 2002.
and as Bloomberg notes, “expect a lot more corporate downgrades and fallen angels” as the economic damage spreads, as the impact of plunging earnings and spiraling funding costs are tallied.