US Fallen Angel/Rising Star Monitor: 3Q26
Winnie Cisar: Global Head of Strategy
Zachary Griffiths, CFA: Head of IG & Macro Strategy
Kathleen Tang: Analyst, Strategy
08 October 2026
- How the balance between prospective fallen angels and rising stars is shaping crossover credit risk.
- What newly identified candidates reveal about potential rating transitions across major corporate sectors.
- Why shifting migration patterns matter when assessing credit quality within BBB and BB markets.
- How changing spreads, yields, and relative valuations are influencing the crossover opportunity set.
- Where breakeven analysis highlights resilience and vulnerability under further market repricing.
Executive Summary
The report evaluates potential rating transitions across the corporate crossover market. It highlights changing risks within investment grade and high yield credit.
Prospective fallen angels continue to represent a larger pool than rising stars. Several newly identified issuers broaden the range of sectors under scrutiny.
Rating migration slowed while upgrades remained more prevalent than downgrades. However, selected rating categories experienced greater movement and issuer specific pressure.
Market repricing widened spreads and lifted yields across crossover credit. Relative valuations shifted as economic conditions and risk sentiment changed.
Breakeven measures indicate greater protection against potential yield increases. Meanwhile, excess returns remain exposed to further spread widening.
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