ratings downgrades

Standard Poors

The Risk Of Huge Increase In Spending And Public Debt Due To Covid-19 Will Lead To More Ratings Downgrades

S&P has warned of the possibility of a second wave of sovereign credit rating downgrades around the world. So far in 2020, the firm has downgraded ratings or outlook for 60 countries. The problem lies in the effects of COVID-19 that be will dragged on over the next few years. In fact, some countries will add 15-20 GDP points to their public debt, which otherwise would have taken four or five years to accumulate. In addition, public spending will continue to be above normal for a period that can extend 3-5 years.

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Thursday’s US Corp graph: downgrades hike

Ouch. The US corporate sector accumulates 171 credit downgrades in the first quarter, the highest since the 2009. In the balance of revisions (upward/downward), the ratio is 0.69, far from the highs of 2011 when for each rating cut down there were two ratings changing upwards. In the sectoral breakdown, three areas stand out as having a low rate of upward/downward revisions: telecommunications, financials and non-cyclical consumption. In the opposite side, the…