Sign up for our daily briefing
Make your busy days simpler with Axios AM/PM. Catch up on what's new and why it matters in just 5 minutes.
Stay on top of the latest market trends
Subscribe to Axios Markets for the latest market trends and economic insights. Sign up for free.
Sports news worthy of your time
Binge on the stats and stories that drive the sports world with Axios Sports. Sign up for free.
Tech news worthy of your time
Get our smart take on technology from the Valley and D.C. with Axios Login. Sign up for free.
Get the inside stories
Get an insider's guide to the new White House with Axios Sneak Peek. Sign up for free.
Catch up on coronavirus stories and special reports, curated by Mike Allen everyday
Catch up on coronavirus stories and special reports, curated by Mike Allen everyday
Want a daily digest of the top Denver news?
Get a daily digest of the most important stories affecting your hometown with Axios Denver
Want a daily digest of the top Des Moines news?
Get a daily digest of the most important stories affecting your hometown with Axios Des Moines
Want a daily digest of the top Twin Cities news?
Get a daily digest of the most important stories affecting your hometown with Axios Twin Cities
Want a daily digest of the top Tampa Bay news?
Get a daily digest of the most important stories affecting your hometown with Axios Tampa Bay
Want a daily digest of the top Charlotte news?
Get a daily digest of the most important stories affecting your hometown with Axios Charlotte
Illustration: Sarah Grillo/Axios
The number of companies around the world that had their credit ratings downgraded from investment grade to speculative grade — so-called fallen angels — hit the lowest level in 23 years, S&P Global reported Thursday.
Context: There were only 19 fallen angels last year, which marked the fourth consecutive year the number has declined, the longest stretch on record.
But, but, but: While BBB-rated bonds grew to a record 50% of all outstanding investment grade U.S. corporate debt last year, downgrades fell to a record low 0.3%, data from BofA Global Research found.
- The number of “zombie companies,” or businesses with interest payments higher than their annual earnings, has reached a level not seen since the global financial crisis, BofA estimated.
- And the percentage of public companies in the U.S. losing money over 12 months has risen close to 40%, its highest level since the late 1990s outside of post-recession periods, WSJ reported.
Why it matters: Many companies appear to be holding their investment grade ratings by adding significantly to their debt load.
- "Last week, researchers at the Federal Reserve Bank of New York also warned that downgrades to the flood of bonds sitting at the lower end of the investment-grade spectrum pose a financial stability concern," MarketWatch's Joy Wiltermuth writes.
- "In October, the International Monetary Fund said that some $19 trillion of corporate debt globally could be at risk in a recession that is half as severe as the global financial crisis, in its annual global financial stability report."
On the other side: The global tally of companies with credit ratings upgraded to investment grade from speculative grade was 22 in 2019 — the lowest in 10 years.
Go deeper: S&P 500 companies expect declining earnings and profit margins for Q4