Fitch Fundamentals Index: U.S. Credit Conditions Weaken Further in 2Q16

CHICAGO--(BUSINESS WIRE)-- The U.S. Fitch Fundamentals Index dropped to -3 in 2Q16 from -2 the previous quarter as a pattern of weakening credit quality, mostly in the corporate finance space, took its toll, says Fitch Ratings. Six of the index's 10 components remain in negative territory, three of those strongly so. The index is now at the lowest level since 3Q09.

"A key driver has been pressure in certain corners of the corporates area, leading to subdued growth expectations, higher defaults, and sharply lower recoveries, which at $0.20 on the dollar, are among the lowest that Fitch has seen," says James Batterman, Group Credit Officer, Fitch Ratings.

The index's components for corporate defaults, high yield recoveries and the CDS outlook all remained at -10, the lowest score, in 2Q. Concerns over global growth and commodity prices persisted, pushing the corporate capex forecast indicator into negative territory while the corporate EBITDA forecast indicator, although still positive, was less so than the prior quarter. Average corporate capex growth stands at just 2%, as companies weigh the costs and benefits of new investment.

The index's mortgage performance score was the only component to remain in strongly positive territory as prime mortgage delinquencies remain low.

U.S. Fitch Fundamentals Index

The Fitch Fundamentals Index (FFI) tracks changes in credit fundamentals across key sectors of the U.S. economy. Analyzing the relative strength or weakness of the index or its sub-components can provide insight into how conducive conditions in the U.S. are towards economic growth.

The trend in potential drivers or constraints on economic growth or decline is indicated by the relative strength or weakness of the FFI, which ranges from +10 to -10. The FFI's components include mortgage and credit card performance, corporate defaults, high-yield recoveries, rating actions and Outlooks, EBITDA and CapEx forecasts, banking sector health, the CDS outlook, and transportation trends. Released quarterly, the FFI relies primarily on proprietary Fitch-sourced data.

To view the interactive FFI, please visit: http://160112ffius.businesscatalyst.com/index.html

The full report, "The Fitch Fundamentals Index: 2Q16," is available at www.fitchratings.com

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

Fitch Fundamentals Index - US (2Q16)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=885033

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.

View source version on businesswire.com: http://www.businesswire.com/news/home/20160718005940/en/

Fitch Ratings
William Warlick
Senior Analyst
+1-312-368-3141
Fitch Ratings, Inc.
70 W. Madison St.
Chicago, IL 60602
or
James Batterman
Group Credit Officer
+1-212-908-0385
or
Media Relations
Alyssa Castelli, +1 212-908-0540
[email protected]

Source: Fitch Ratings

---

Serious News for Serious Traders! Try StreetInsider.com Premium Free!

---

You May Also Be Interested In

• ASEAN Records and ASIA Records Announce Major Expansion as Verified Record Certification Grows Across Asia
• Pump.fun vs MemeToro vs Four.meme: Which Memecoin Launchpad Could Lead 2026?
• AI Memecoin Trading 2026: Why Automated Agents Are Becoming the Future of Meme Markets