Credit Benchmark, the provider of global credit consensus ratings and analytics, today said that the already low 1% default rate among US oil & gas companies is likely to drop further to 0.7% in 2024, positioning it as a positive outlier among US industries.

“The benign default risk outlook for the US oil & gas industry has been driven by the war in Ukraine and exacerbated by instability in the Middle East, resulting in high energy prices, despite attempts to ramp up production globally,” says Michael Crumpler, CEO of Credit Benchmark. “We predict that more US oil & gas firms will move into the investment-grade category in 2024, swelling the ranks of the ‘a’ and ‘bbb’ rating categories.”

“We also expect this benign credit trend in US oil & gas to continue regardless of the outcome of the US election later this year,” adds Mr Crumpler.

US oil & gas is one of 13 US industries discussed in Credit Benchmark’s new 2024 Default Risk Outlook. While the US pharma industry also has a benign default risk outlook, Credit Benchmark predicts that most other US industries will record a slight rise in their default rate. However, the US telecoms sector is a negative outlier with the largest projected increase in default rates in 2024, followed by US consumer services and leveraged loans.

According to Credit Benchmark’s new report, default risks are likely to continue to rise and then peak by mid-2024 across most US industries. However, credit quality should recover in H2 2024, assuming that the Fed adopts a more accommodative monetary policy and barring any further escalation of geopolitical risks.

Credit Benchmark’s new report covers 13 US industries, representing around 13,000 entities, 70% of which are not rated by a credit rating agency. This significant coverage allows Credit Benchmark to make credible sector-specific default risk projections for 2024.

All of Credit Benchmark’s data and projections are based on borrower probability-of-default estimates, which are aggregated from over 40 global banks, nearly half of which are GSIBs (Global Systemically Important Banks), and anonymized.

Note to Editors:

About Credit Benchmark

Credit Benchmark provides Credit Consensus Ratings and Analytics that are calculated by using the data and internal credit risk ratings contributed by more than 40 leading global financial institutions, almost half of which are Global Systemically Important Banks (GSIBs).

The contributions are aggregated, anonymized, and published twice monthly in the form of unique Credit Consensus Ratings and Credit Indices. This means that Credit Benchmark is making the views of far more analysts publicly available than ever before.

Covering over 100,000 entities, 90% of which are unrated by any other publicly available traditional ratings methods, Credit Benchmark’s credit risk data covers around 170 countries and more than 200 industries worldwide.

Credit Benchmark’s insights are trusted by a host of the largest financial institutions in the world, either to benchmark their own internal credit risk analysis against those of a global peer group, or simply to gain accurate credit risk views where none were previously available.

Credit Benchmark was founded in 2015 and is headquartered in London, with offices in New York and Bangalore.

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