Standard & Poor’s slapped emerging markets with 70 sovereign and corporate credit rating downgrades in the second quarter, and awarded just 29 upgrades, but at least ratio of cuts to promotions is improving.
The downgrade-to-upgrade ratio eased to 2.4 times in the three months through June, compared to 5.3 times in the first three months of the year, the rating agency said in a report today.
The demotions were largely triggered by cuts to Argentina, Russia and South Africa’s sovereign ratings, as well as a dimmer view on Brazil’s banking sector.
Diane Vazza, head of Standard & Poor’s global fixed income research, said in the report.
Looking forward, the rating outlooks in the EEMEA region show the highest net negative bias, followed by emerging Asia and Latin America. Russian entities are driving the elevated negative bias in the EEMEA region, just as Indian entities are doing in emerging Asia, and Brazilian and Argentine entities are doing in Latin America.