Fitch Reviews Borderline Credits

New York City—Among the US companies it rates with credit ratings along the border of investment grade—ratings in the BBB-/BB+ range—Fitch Ratings expects more fallen angels than rising stars over the next one to two years, according to a recent report.

“Fitch currently has three times more BBB-/negative rating outlook issuers than potential near-term upgrades at BB+, implying more downgrades than upgrades among these issuers over the intermediate term,” the ratings agency states in “Crossing Over,” a special report whose inaugural issue was released late last month. Fitch plans to update the report going forward.

Although upgrades have outpaced downgrades in the borderline category so far this year, Fitch points out that those upgrades have been due either to M&A activity or to the termination of a leveraged buyout and adoption of investment grade financial policies and capital structure.