Fallen Angels vs Rising Stars: Scorable Credit Research Helps Investors Anticipate Critical Rating Migrations Ahead of the Market

BondIT Global, a provider of fixed income technology, has further enhanced its Scorable Credit Research for more comprehensive risk monitoring of corporate bonds and credit spreads. With Scorable’s newly launched Rating Transition Model, fixed income investors can now anticipate both rating downgrades and upgrades up to twelve months in advance. 

“Our Scorable credit model indicates a sizable amount of rating migrations this year with fallen angels still outnumbering rising stars. In this late-cycle market environment, forward-looking credit analysis is crucial. With our latest product release, asset and wealth managers can manage their credit risk exposure more effectively and spot investment opportunities and risks early on”, says Dan Taylor, MD, Head of Americas at BondIT Global.

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The global economy may be showing signs of recovery, but uncertainty and downside risks remain high. Scorable’s latest analysis shows that investors should brace for more fallen angels. Around a quarter of the more than 400 BBB and BBB- rated corporate issuers in the Scorable universe have a considerable risk of a rating downgrade in the next 12 months. On the upside, among the more than 200 issuers with a BB+ or BB rating nearly a third display a strong upgrade probability and could migrate from high yield to investment grade within the next year.

“Recognizing and understanding market dynamics early on gives asset managers valuable time to adjust their investment portfolio if necessary. With Scorable’s explainable AI, investors can detect future changes in credit ratings and spreads that could impact their portfolio value”, says Oliver Kroll, Managing Director at BondIT Global and Co-Founder of the Scorable Product.

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Scorable empowers asset and wealth managers to broaden their research capacity and to efficiently manage their exposures through volatile market environments. The innovative AI solution translates raw data from a vast array of sources, including financial statements, fundamentals and capital market data, into actionable insights. Thus, users can monitor corporate bond ratings and spreads, and anticipate changes before they occur.

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