US Fallen Angel/Rising Star Monitor: 3Q25
Winnie Cisar - Global Head of Strategy, CreditSights
Zachary Griffiths, CFA - Head of IG & Macro Strategy, CreditSights
Brian Perez - Analyst, Credit Strategy, CreditSights
Kathleen Tang - Analyst, Strategy, CreditSights
9 October 2025
Insights into US Fallen Angel/Rising Star Monitor: 3Q25, including:
- Crossover Credit Trends: Gain insight into US fallen angel and rising star credit monitor dynamics, including ratings migration and spread performance within the BBB/BB space.
- Key Candidates Identified: Explore the latest list of prospective fallen angels ($25.7 bn across four sectors) and rising stars ($10 bn), with new candidates highlighted for this quarter.
- Spread & Yield Analysis: Review updated OAS and YTW heatmaps by rating, duration, and sector, revealing current market opportunities and risk levels.
- Breakeven and Return Profiles: See how breakeven points and total returns for BBB and BB ratings have shifted, with BBBs showing strong momentum and BBs presenting balanced upgrade/downgrade ratios.
- Sector-Specific Volatility: Discover which sectors – such as Technology & Electronics and Transportation – experienced the highest rating migration, driven by notable upgrades and downgrades.
Executive Summary
- We provide an update on potential near-term fallen angel/rising star candidates, as well as ratings migration, valuations and breakeven analysis in the BBB/BB crossover space. Accompanying OAS and YTW heatmaps of the crossover space by rating & duration and sector & rating are provided in the Appendix.
- The CreditSights global analyst team identified two potential rising star candidates and six potential fallen angel candidates over the next ~12-month horizon within the US IG and HY indices. The volume of prospective fallen angel debt totals $25.7 bn across four sectors and continues to outweigh the volume of prospective rising star debt ($10 bn) by 2.6x.
- At the broad rating level, 1.9% of starting BBB-rated face value migrated out of the rating band to an AA, A or BB rating, over double the rate of BBs (0.8%). Rating momentum was overwhelmingly positive for BBBs, with 96% of departed face value upgraded, while BBs exhibited a more balanced rating transition dynamic, with a ~2:3 upgrade-to-downgrade ratio.
Relative Value
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