Despite market volatility and political uncertainty in 2018, funding conditions remained accommodative, and the global speculative-grade corporate default rate fell to 2.1 per cent from 2.5 per cent at the end of 2017, said S&P Global Fixed Income Research in its "2018 Annual Global Corporate Default And Rating Transition Study."
The number of corporate defaults globally fell to 82, its lowest level since 2014.
"By many measures, 2018 showed improved performance for S&P Global Ratings' corporate credit globally," said Diane Vazza, head of S&P Global Fixed Income Research. "Many of S&P Global Ratings' measures for rating performance and rating stability, as well as the proportion of upgrades, rose to their highest levels since 2014."
More companies were upgraded than downgraded in 2018, and 73 per cent of companies retained the same ratings by year-end. All companies that defaulted in 2018 that were rated at the start of the year were speculative grade (rated 'BB+' or lower), and 74 per cent of these were in the 'CCC'/'C' rating category. As a result, the one-year global Gini ratio (a measure of the rank-ordering power of ratings over a given time horizon) rose to 93 per cent in 2018 from 92.7 per cent in 2017, reaching its highest since 2014.