1Q 2021 Investor Presentation
Managing Ratings¹ in Turbulent Times
Recovery in credit quality under way; corporate rating actions reveal a thoughtful and measured approach to credit
Upgrades overtaking downgrades; speculative grade default rate to fall
350
Rising stars Fallen angels → Upgrades → Downgrades --Represent default rate
Building heights represent the global speculative grade default rate on a trailing twelve months basis
300
6.8
Some highly exposed sectors still under pressure
SECTOR
% NEGATIVE OUTLOOK OR REVIEW
68
Hotel, Gaming & Leisure
Transportation: Consumer
Automotive
39
7%
Consumer goods: Non-durable
38
Aerospace & Defense
37
6%
Global - All Sectors
25
60
250
200
3.6
150
100
50
5%
Represents the percentage of issuers within each sector with a negative outlook or under review for downgrade at 30 March 2021.
Majority of downgrades
since virus outbreak
4%
within speculative grade
1,014
Speculative Grade
622
B
3.2
Approximately
3,500
3%
rated corporates
globally
155
196
Investment Grade
Ba
191
Caa
°
109
Baa
39
2%
1
6
A
Aa
Aaa
1
13
8
1 9
2
6
4
2
0 1
3
0
1
2 3
1
3
0
2
3
4
0
T
T
MAR
APR
MAY
JUN
JUL
AUG
SEP
OCT
NOV
DEC
JAN
FEB
MAR
2020
DEC
FORECAST
2021
1.
COVID-19 downgrades
pick up as the virus
spreads around the world
Non-Financial Corporates as of 1Q 2021.
Moody's | Better decisions
Trailing twelve month speculative-grade default rate; forecast uses Credit Transition Model>>
1%
Calculated based on each issuer family since 1 March 2020; some issuer families have been downgraded more than one time over that horizon.
Timely analytical response to COVID-19
16 Sector exposure to
MAR Covid-19 identified
2020
07 Covid hits mostly
MAY
smaller, highly
24 Resurgent infections test
NOV resilience
2020
leveraged companies
2020
MAR
17 Measured approach
described
07
Focus shifts from liquidity
OCT
2020
2020
to earnings growth and
debt capacity
MAR
2021
31 1 year on, recovery
underway
E
1Q 2021 Investor Presentation
32View entire presentation