Worst Spate of Downgrades Since 2021 Signals Pain: Credit Weekly

Credit rating downgrades are becoming more frequent, the latest sign that companies are starting to perform worse and raising fresh questions about whether corporate debt valuations should be as high as they are.

In the second quarter, around $94 billion of high-grade US debt was downgraded, compared with just $78 billion of upgrades, according to JPMorgan Chase & Co. strategists. It was the first time since early 2021 that downgrades outpaced upgrades in dollar terms, and more companies are at risk of being demoted later this year as economic uncertainty rises, JPMorgan strategists including Eric Beinstein and Silvi Mantri wrote ...