Fitch Fundamentals Index - U.S. Remains Negative on Continued Credit Weakness

CHICAGO--(BUSINESS WIRE)-- Continued credit weakness kept the U.S. Fitch Fundamentals Index in negative territory during the first quarter of 2016, marking the third consecutive negative quarter, according to Fitch Ratings in the new Fundamentals Index - U.S.

Deterioration among high-yield corporate indicators, balanced by improving mortgage delinquency trends, led to an index reading of -2, signaling a modest weakening pattern across multiple asset classes.

"After five years of flat or positive movement, the index is now pointing to worsening credit conditions in the U.S." says Bill Warlick, Senior Director, Macro Credit Research. "Further deterioration in some of these key indicators could signal a shift in the credit environment and dampen U.S. economic growth later in 2016."

Corporate indicators including Corporate Default Performance, Rating Actions and Outlooks, and High-Yield Recoveries were all strongly negative in the first quarter, primarily due to energy and mining sector bankruptcies. The balance of positive to negative ratings is at its worst since 2011 while high-yield recovery rates, at 21%, are at their lowest level in more than 10 years. Meanwhile, improvements in the Corporate EBITDA and Capex Forecast scores mostly reflect the lower base for earnings and capital spending in 2015.

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 learn more about the FFI, please visit 'www.thewhyforum.com/ffi'.

The full report, "Fitch Fundamentals Index: 1Q16," is available at www.fitchratings.com or by clicking on the link.

Additional information is available at www.fitchratings.com

Fitch Fundamentals Index - US (1Q16)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=880342

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/20160420005906/en/

Fitch Ratings
William Warlick
Senior Director
+1-312-368-3141
Fitch Ratings, Inc.
70 W. Madison St.
Chicago, IL 60602
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

• Verizon to cut 3,000 jobs as it shifts stores to franchises
• DBV Technologies (DBVT) Misses Q2 EPS by 12c
• First Financial (FFIN) Reports In-Line Q2 EPS