The COVID-19 pandemic not only disrupted lives and businesses around the world for more than a year, but also the credit ratings of large corporations.
A business credit rating serves as the primary measure of creditworthiness, but can also determine the cost of borrowing. These range from AAA to leading companies like Johnson & Johnson
and Microsoft Corp.
to D for default businesses.
Increasingly, credit ratings could also herald a potential path of recovery for industries hit hard by the protracted public health crisis.
Take a look at travel and entertainment, according to a new report from Credit Benchmark, an area that has seen half of global investment-grade companies fall into a state of high productivity, or “junk. “During the pandemic, according to a new report from Credit Benchmark.
Even as part of Europe is still in a locked state To prevent coronavirus, travel and entertainment experienced the highest rate of “fallen angel” (at 11.1%) returning to investment during a period of crisis, (see chart below) ).
The report identified 1,051 fallen angels among the 6,895 companies it sampled globally, about 15% of the total. It shows that about 5% have returned on investment.
According to the report, retailers, oil and gas, cars and parts have also fluctuated on the credit rating front over the past year, with the shift between the two main industries now being the main focus of investors private.
Upgrading and downgrading can make a big difference to a company in terms of borrowing costs. Average yield on bonds issued by US investment firms today in the range of 2.21%while it’s almost double for those in speculative level territory now about 4.21%.
and Norwegian Cruise Line Holdings Ltd
borrowed billions of dong because most of their ships are inactive.
But along with other “rebound” deals, Carnival shares rose 31.9% on Thursday, while shares of Royal Caribbean and Norway rose about 20%, according to FactSet data.
That compares to the Dow Jones industrial average
rose 9.5% in the same period, while the S&P 500 index
has raised 9.1%.