Credit quality improved globally last quarter and is poised to continue its overall upward trend, says Moody’s Investors Service says in its latest rating actions, reviews, and outlooks report.

During the third quarter, rating upgrades outpaced downgrades by 1.36 to one, says Moody’s. “The positive trend in rating actions is likely to continue, as more issuers were on review for upgrade at the end of the third quarter than at the previous quarter’s end – 5.6% versus 2.7% — while the share of issuers on review for downgrade remained essentially unchanged at roughly 3.5%,” says Moody’s vice president/senior analyst Praveen Varma.

This was the third quarter in a row that upgrades outnumbered downgrades. Moody’s reports approximately 470 issuers were upgraded during the third quarter, compared to 340 issuers downgraded.

“Data suggests that credit quality will be improving over the coming several months, but more so for the intermediate investment-grade companies,” says Varma. He notes that among these issuers with single A and Baa ratings, 7.7% are currently on review for upgrade, compared to 4.6% for speculative-rated issuers.

Improvement in credit quality has been uneven across the globe. The Asia-Pacific region has posted the most impressive gains, says Varma, with one-fifth of all Asia-Pacific issuers on review for upgrade at the end of September. By comparison, only 3.4% of North American issuers were on review for upgrade on that date.

Europe has seen more downgrades than upgrades over the last nine months, with 87 downgrades versus 71 upgrades. Moody’s says this pattern is likely to change in the coming months, given that there are currently more European issuers on review for upgrade (51) than downgrade (28).

Credit improvement has also been uneven across industries. Finance and bank issuers, for example, fared particularly well last quarter, accounting for 39% of all upgrades compared with only 20% in the previous quarter. Issuers in consumer industries – which include products and services with primarily consumer focus – bore the brunt of downgrades last quarter, accounting for 55% of the total. Of all the issuers on review for downgrade at the end of the quarter, 48% were in the consumer industries.