The Coming Storm: ‘BBB’ Corporates in a Potential Downturn

Funding costs for U.S. and European corporate issuers remained favorable over an extended period of time thanks to a benign backdrop of synchronized global growth, historically low interest rates and abundant liquidity in recent years.

This Fitch Ratings white paper examines a portfolio of ‘BBB’ category corporate issuers in the U.S. and Europe in the context of differences in the composition and concentration of ‘BBB’ issuance; transition and default (T&D) patterns in past economic downturns; and issuers’ current leverage and financial flexibility amid shifting investor sentiment.