Negative credit rating activity picked up in the second quarter as the global economic outlook dimmed, Fitch Ratings reports.
In a research note, the rating agency said the number of downgrades was double the volume of upgrades in the second quarter — with 111 downgrades across its overall portfolio of global corporate issuers, compared with 55 upgrades.
“This was the second consecutive quarter of downgrades exceeding upgrades on a global basis,” Fitch said, with the gap between downgrades and upgrades reaching its widest point since 2022.
Just over half (54%) of the rating downgrades came from issuers in the high-yield category, it noted.
By industry, the utilities sector led the way, accounting for 25% of overall downgrade activity — yet, at the same time, it also represented 14.5% of upgrade activity in the second quarter.
The chemicals and natural resources sectors ranked a distant second in downgrades, with both industries representing 9% of downgrade activity, followed by the tech sector (7%) and the building materials sector (6%).
Along with utilities, upgrade activity was also led by the pharmaceutical sector and the oil and gas sector.
Amid the strong downgrade activity, the share of issuers with negative rating outlooks dropped from 13% in the previous quarter to 10% in the second quarter, Fitch noted, while the share of issuers with positive outlooks held steady at 9%.