![]() ![]() ![]() §Excludes downgrades to 'D', shown separately in the default column. All intermediate ratings are disregarded. *This table compares the net change in ratings from the first to the last day of each year. Summary Of Annual Nonhousing Rating Changes (%)* There was a 0.02% default rate for 'A' ratings in 2020, where the historical average is 0.004%, and a 0.34% default rate for 'BBB', where the historical average is 0.011%. The average number of investment-grade defaults in housing is just over half a default per year. The previous high for investment-grade defaults was four, in 2012. ![]() In 2020, there was an unusually high number of investment-grade defaults, with seven, all in housing. For the past four years, S&P Global Ratings has categorized every tax-secured and appropriation rating action as either state or local government in its quarterly rating reports. Most tax-secured and appropriation ratings are for local government, so local government rating movement generally determines the changes for these two rating types. The tax-secured category covers state or local government general obligations (GOs), while appropriation debt is subject to annual appropriations by issuers and is typically rated one notch lower than the GO rating. Local government ratings are a combination of two security types, tax secured and appropriation. Sources: S&P Global Ratings Research and S&P Global Market Intelligence's CreditPro®. *Includes tax secured and appropriations. Upgrade, Downgrade, And Default Rates By Sector (2020) The previous low was 1.1% in 1981, when we had only 3,625 ratings in that sector. The real departure from normal in this pandemic-affected year was in upgrades, which were the lowest in our data set for nonhousing, at 0.71%. There were only two sectors that saw any defaults-there was one default in higher education, and the rest were in housing. In 2020, downgrades sharply outpaced upgrades, but the actual percentage of downgraded ratings were not that far from historical trends (see tables 1 and 2). For nonhousing, upgrades fell dramatically, to 0.71% of ratings from 4.37% in 2019, and downgrades rose to 3.67%, up from 2% in 2019. 1, 2021, ratings at this level totaled 28 (eight nonhousing and 20 housing).įor housing, upgrades rose to 2.88% of ratings, up from 0.69% in 2019, and downgrades rose to 6.18%, up from 5.09% in 2019. The total number of 'CCC'/'C' ratings, where default activity is concentrated, was 23 at the start of 2020 (seven nonhousing and 16 housing), down from 36 in 2019 (14 nonhousing and 22 housing). The total number of ratings at the beginning of 2020 was 23,738 (including 2,121 housing), up slightly from the start of 2019. From 2011 to 2020, combined USPF defaults averaged 11.3 per year, while the preceding 10 years, from 2000 to 2010, saw an average of fewer than 4.8 defaults a year. public finance (USPF) bonds rated by S&P Global Ratings that defaulted in 2020, up from 11 in 2019. ![]() (Note: these values are not adjusted for the implementation of new rental housing bond criteria in April 2020.)
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