KBRA Releases Research – Coronavirus (COVID-19): Can Credit Hold Ground While the U.S. Is ‘Spiraling Out of Control?’

NEW YORK--()--Kroll Bond Rating Agency (KBRA) releases the Can Credit Hold Ground While the U.S. Is ‘Spiraling Out of Control?’ report, which examines the dramatic tightening in most credit spreads in the face of a still unfolding pandemic, deep economic recession, and an uncertain political landscape.

KBRA believes this reflects existing and prospective monetary and fiscal support, the reopening of the economy, and progress on developing an effective medical response against COVID-19. In addition, KBRA believes the differentiated nature of this downturn and the safe haven status of the U.S. have also served to bolster investor sentiment.

That said, the markets’ view of risk, well rooted in the context of current consensus forecasts of economic and corporate earnings growth, strikes us as overly optimistic. We believe that risks of a second wave of infections are too heavily discounted. And while we do see pent-up demand emerging in 2021, we believe the path to full recovery will be slowed by the time needed to develop and fully distribute a treatment protocol and/or vaccine, and the lasting economic impact from behavioral scars inflicted by the pandemic.

Click here to view the report.

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About KBRA and KBRA Europe

KBRA is a full-service credit rating agency registered with the U.S. Securities and Exchange Commission as an NRSRO. In addition, KBRA is designated as a designated rating organization by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized by the National Association of Insurance Commissioners as a Credit Rating Provider and is a certified Credit Rating Agency (CRA) with the European Securities and Markets Authority (ESMA). Kroll Bond Rating Agency Europe is registered with ESMA as a CRA. Kroll Bond Rating Agency Europe is located at 6-8 College Green, Dublin 2, Ireland.

Contacts

Van Hesser, Senior Managing Director and Chief Strategist
+1 (646) 731-2305
vhesser@kbra.com

Joan Feldbaum-Vidra, Managing Director, Sovereigns
+1 (646) 731-2362
jfeldbaumvidra@kbra.com

Business Development

Dana Bunting, Senior Managing Director, Business Development
+1 (646) 731-2419
dbunting@kbra.com

Contacts

Van Hesser, Senior Managing Director and Chief Strategist
+1 (646) 731-2305
vhesser@kbra.com

Joan Feldbaum-Vidra, Managing Director, Sovereigns
+1 (646) 731-2362
jfeldbaumvidra@kbra.com

Business Development

Dana Bunting, Senior Managing Director, Business Development
+1 (646) 731-2419
dbunting@kbra.com