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Fitch: Sovereign Stresses Mar Corporate Rating Trends in Early 2014

June 11, 2014



NEW YORK--(BUSINESS WIRE)-- Link to Fitch Ratings' Report: Fitch Global Corporate Rating Activity -- First Quarter 2014

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=747883

Ukraine's sovereign downgrade and related lowering of the country ceiling to 'CCC' affected both financial and industrial entities in the first quarter of 2014 - contributing more than a quarter of global corporate finance downgrades at the start of the year and providing a continuation of the prior quarter's modest yet negative global corporate rating drift, according to a new report by Fitch Ratings.

Downgrades affected 3% of global issuers at the start of the year, and upgrades 2% - a margin of downgrades to upgrades of 1.5 to 1.

By broad sector, financial issuer activity remained relatively balanced early in the year with downgrades of 2.6% modestly topping upgrades of 2%. Industrial rating activity showed slightly more strain with downgrades of 3.3% ahead of upgrades of 2%. Ukrainian entities accounted for 20% of industrial and 36% of financial institution downgrades.

Ukraine and Venezuela sovereign downgrades also precipitated the bulk of emerging market rating activity in the first quarter. The EM downgrade rate was 4.1% at the start of the year, on par with prior quarter results, while the upgrade rate slipped to 1.1% from 3.1%.

Global corporate finance issuers assigned a Negative Outlook at the end of March exceeded the share carrying a Positive Outlook ? 13% to 5%, respectively, and aligned closely with prior quarter end results. Financial institution Negative Outlooks rose sharply quarter over quarter (16% vs. 11%), while Positive Outlooks were nearly even at 5%. Industrial Outlook assignments held firm quarter to quarter with a negative bias intact - Negative Outlook (11%) and Positive Outlook (5%).

For a full review of global rating activity by region and industry through 1Q'14, see the report titled 'Fitch Global Corporate Rating Activity - First Quarter 2014,' dated June 11, 2014, available on Fitch's website at www.fitchratings.com under Credit Market Research.

Additional information is available at 'www.fitchratings.com'.

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.



Fitch Ratings

Charlotte Needham, +1 212-908-0794

Senior Director

Fitch Ratings, Inc.

33 Whitehall Street

New York, NY 10004

or

Mariarosa Verde, +1 212-908-0791

Managing Director

or

Media Relations:

Brian Bertsch, +1 212-908-0549

brian.bertsch@fitchratings.com

Source: Fitch Ratings


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