![]() ![]() Cumulative default rates show that lower ratings have historically corresponded to higher default rates over both short and long time horizons (see chart 4). Sources: S&P Global Ratings Credit Research & Insights and S&P Global Market Intelligence's CreditPro®.Īs the Gini ratios show, corporate ratings have served as effective measures of relative credit risk over time, particularly in low-default years (For details on the Gini methodology, refer to Appendix II.)Ĭumulative default rates are another measure of ratings performance over time. Numbers in parentheses are standard deviations. Global average Gini coefficients by broad sector (1981-2022) ![]() Even as defaults are rising, most sectors continue to show low default rates relative to long-term weighted averages-real estate is the lone exception (see chart 2). Sources: S&P Global Ratings Credit Research & Insights and S&P Global Market Intelligence's CreditPro®.ĭefaults increased across several sectors, and only energy and natural resources and transportation saw fewer defaults year over year. *This column includes companies that were no longer rated one year prior to default. (For a detailed explanation of our data sources and methodology, see Appendix I.) Table 1 The default rates that we refer to as weighted averages in this study use the number of issuers at the beginning of each year as the basis for each year's weight. ![]() We calculated all default rates on an issuer-weighted basis. This default and rating transition study includes industrials, utilities, financial institutions (banks, brokerages, asset managers, and other financial entities), and insurance companies globally with long-term local currency ratings from S&P Global Ratings. ![]()
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