Fixed income: Forecasting ‘fallen angel’ downgrades

 The last decade has transformed the investment grade credit market. It’s not just that the size of the market has grown immensely, it’s that the average credit quality is much lower, meaning that risk of ‘fallen angel’ downgrades from investment grade to high yield rating is much higher. When the team stress-tested the investment grade market, the results were surprising: the number of expected downgrades could reach levels not seen since 2016. 

We interview Madeleine about the research, why investor’s earlier fears about company over-leveraging have softened as balance sheets improved and why a hard Brexit might not drive up the number of UK downgrades as you might think.

·         Madeleine King, Co-Head of Pan-European Investment Grade Research

·         Mark Chappel, Senior Content Manager

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