S&P Global Ratingss3.amazonaws.com/.../wp-content/uploads/2020/01/2019-SPGI-IFB-R… · Israel Saudi Arabia U.A.E. South Africa Russia Japan South Korea Taiwan China Hong Kong Singapore

Revenue by Type(dollars in millions)

■ Non-Transaction $1,357 $1,448 $1,506

■ Transaction 1,178 1,540 1,377

Total Revenue $2,535 $2,988 $2,883

1,500

$3,000

’16

54%

46%

’18

48%

52%

’17

48%

52%

Revenue by Geography(dollars in millions)

■ U.S. $1,462 $1,716 $1,619

■ Ex-U.S. 1,073 1,272 1,264

Total Revenue $2,535 $2,988 $2,883

1,500

$3,000

’16

58%

42%

’17

57%

43%

’18

44%

56%

S&P GLOBAL 2019 INVESTOR FACT BOOK 14

Credit Ratings. Research. Insights. Spanning 27 countries, S&P Global Ratings is a leading provider of credit ratings, research, and insights essential to driving growth and transparency. S&P Global Ratings’ analysts offer a combination of global perspective and local insight.

How S&P Global Ratings Generates Revenue

Our Focus Forward

Strengthen analytical excellence to drive market relevance

Leverage new technology and data capabilities to transform our value chain

Enter new high-potential geographies with innovative products

Extend our strong analytical capabilities to new opportunities such as ESG and cybersecurity

Non-Transaction:Surveillance of a credit rating, annual fees for customer relationship-based pricing programs, and fees for entity credit ratings and global research and analytics

Transaction: Ratings for new issuance of corporate, financial institution, insurance, government, and structured finance debt instruments; bank loan ratings; and corporate credit estimates

S&P Global Ratingsspglobal.com/ratings

Notes:

The Ratings division includes S&P Global Ratings, which is registered with the U.S. Securities and Exchange Commission as a Nationally Recognized Statistical Rating Organization (“NRSRO”); CRISIL Limited, a global analytical company incorporated in India; and certain other ratings-related businesses

Division revenues do not include interdivision revenue elimination

S&P Global Ratings rates more than $48 trillion of global debt and has more than 1 million ratings outstandingData as of 12/31/2018

http://spglobal.com/ratings


Corporate ratings are now a larger portion of S&P Global Ratings’ business

1,000

2,000

$3,000

Change in Revenue Mix: 2007 vs. 2018(dollars in millions)

’16 ’18’14 ’15

11%

10%

55%

15%

8%

12%

11%

54%

16%

7%

12%

10%

52%

16%

10%

11%

11%

51%

17%

9%

11%

13%

51%

17%

8%

15%

9%

44%

27%

6%

’17

■ CRISIL, Other*

■ Structured Finance

■ Corporates

■ Financial Institutions

■ Governments

Total

’07

1,271 1,253 1,3071,3071,933

1,242 1,327 1,6551,2581,578

1,412 1,404 1,4501,4111,321

$1,278 $1,305 $1,334$1,273$1,123

1,225 1,244 1,2431,183 1,1,205

$2,455$2,138 $2,428 $2,535 $2,988

1,323

1,558

1,450

$1,349

1,203

$2,883

2,500

500

1,500

$3,000

2,500

500

1,000

1,500

’06 ’08 ’16 ’18’17’10 ’12 ’14’04’02 ’03 ’05 ’07 ’09 ’11 ’13 ’15’01’00

2,000

■ CRISIL, Other* ■ Structured Finance ■ Corporates, Financial Institutions, and Governments

2008 vs. 2007: 7% decline in revenue from Corporates, Financial Institutions, and Governments

Revenue: 2000–2018(dollars in millions)

Corporate Ratings Are Now a Larger Portion of the Business

Financial Crisis Had Modest Impact on Revenue from Corporates, Financial Institutions, and Governments

Details may not sum to total due to rounding

* Other includes interdivision royalty, Taiwan Ratings Corporation, and adjustments

S&P Global Ratings Revenue by Quarter: 2016–2018

(dollars in millions) 2016 2017 2018

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

CRISIL, Other* $ 71 $ 75 $ 78 $ 80 $ 79 $ 83 $ 87 $ 86 $ 88 $ 90 $ 87 $ 84

Structured Finance 57 64 60 72 58 74 81 94 76 87 80 80

Corporates 272 370 346 339 410 419 412 414 419 427 360 353

Financial Institutions 98 107 96 104 110 113 104 122 116 114 126 95

Governments 55 65 62 63 56 59 55 73 49 57 48 49

Total $ 552 $ 682 $ 642 $ 658 $ 714 $ 747 $ 739 $ 789 $ 748 $ 775 $ 700 $ 661


*Other includes interdivision royalty, Taiwan Ratings Corporation, and adjustments

S&P Global Ratings

United StatesArgentina

United KingdomPolandU.A.E.

ChinaHong KongIndiaSingapore

CRISIL: Revenue by Segment(dollars in millions)

■ Ratings Services $ 70 $ 74 $ 75

■ Research Services 150 165 163

■ Advisory Services 11 15 20

Total $ 231 $ 254 $ 258

’17 ’18’16

55

165

110

220

$275

70% of CRISIL’s Revenue Is from Outside India(dollars in millions)

55

110

165

220

$275

2008 2018

■ Rest of World $ 69 $182

■ India 49 76

Total $118 $258

North America: 50%$92 million

Europe: 37%$67 million

Other Regions: 13%$24 million

$182 million


CRISIL LimitedAn S&P Global Company

CRISIL is a leading agile and innovative global analytics company. It is India’s foremost provider of ratings, data, research, analytics, and solutions. A strong track record of growth and innovation and a global footprint set it apart. It delivers independent opinions, actionable insights, and efficient solutions to more than 100,000 customers. CRISIL’s businesses operate in India, the U.S., the U.K., Argentina, Poland, China, the U.A.E., Hong Kong, and Singapore. CRISIL is listed on the NSE and the BSE stock exchanges in India. S&P Global Inc. owns nearly 68% of CRISIL.

spglobal.com/CRISIL

Mission Making markets function better by providing independent opinions, actionable insights, and efficient solutions

Customer Value PropositionCRISIL’s market leading ratings, benchmarks, analytics, and solutions empower clients and stakeholders to make decisions with conviction


Source:

CRISIL Limited Annual Report 2018

Converted from Rupees to Dollars using standard exchange rate of 1 USD = 67.74 INR

CRISIL’s Diversified Service Mix and Global Presence

CRISIL Presence CustomersIndia

Corporates

Banks and non-banking finance companies

Mutual funds and insurance companies

Governments

Global

Corporate and investment banks

Asset management firms, private equity and hedge funds

Insurance companies

Multilaterals

CapabilitiesRatings

Assessments

Research

Analytics

Risk Services

Solutions

http://spglobal.com/CRISIL

CanadaU.S.MexicoColombiaBrazilChileArgentina

SwedenU.K.IrelandGermanyFranceSpainPolandItalyIsraelSaudi ArabiaU.A.E.South Africa

RussiaJapanSouth KoreaTaiwanChinaHong KongSingaporeAustraliaIndia


Corporate Ratings

Financial Institution Ratings

Insurance Company Ratings

Government Security Ratings

Structured Finance Ratings

54,510 58,989 6,562 901,312 36,838Industrials

Utilities

Project Finance

Banks

Brokers/Dealers

Finance Companies

Other Financial Institutions

Health

Life

Property/Casualty

Reinsurance/ Specialty

Bond

International Public Finance

U.S. Public Finance

Sovereigns

Asset-Backed Commercial Paper

Asset-Backed Securities

Collateralized Debt Obligations

Commercial Mortgage- Backed Securities

Residential Mortgage- Backed Securities

Servicer Evaluations

CRISIL Presence

n S&P Global Ratings (NRSRO)

n S&P Global Ratings locations not issuing credit ratings

nS&P Global Ratings (NRSRO affiliate)

n CRISIL (not part of NRSRO)

n Location is not part of the NRSRO

Broad and Deep Analytical Coverage

S&P Global Ratings’ credit ratings are opinions about credit risk; they express our view on the relative likelihood that debt issued by companies and governments will be repaid on time and in full. These ratings reflect in-depth analysis of the issuers and their debt obligations.

Globally, S&P Global Ratings rated more than $3.4 trillion in new debt par-value in 2018Data as of 12/31/2018

S&P Global Ratings Thought Leadership Spanning the world’s major markets, S&P Global Ratings’ experienced team of analysts and economists provide timely insights on key issues that matter to investors and other market participants. In the past year, we have delivered compelling research and forward-looking credit-related stories on topics such as the credit cycle, leveraged finance, the U.S.-China trade dispute, Brexit, China, fintech, cybersecurity, and sustainable finance.

Across 2018, the “When The Cycle Turns” series of research examined the impact that a potential credit-cycle downturn — involving deteriorating economic and credit fundamentals, with rising defaults and scarce liquidity — may have on ratings and market conditions. Our “Global Trade at a Crossroads” series provided periodic updates of our views on the significant risks and opportunities facing investors and issuers from the ongoing trade dispute between the U.S. and China.

With the growth of the green finance market continuing unabated, S&P Global Ratings stepped up its capabilities in the areas of environmental and climate finance research. In 2018, we established a cross-practice Sustainable Finance analytical team to work alongside our new Green Evaluation service to measure climate risk and environmental impact. In 2019, we launched our new ESG (Environmental, Social and Governance) Evaluation framework to assess sustainability risks at the corporate level.

Source: Form NRSRO as filed on 3/28/2019

S&P Global Ratings is registered with the U.S. Securities and Exchange Commission as a Nationally Recognized Statistical Rating Organization (“NRSRO”), and does not include CRISIL Limited and certain other ratings-related businesses. Map is for illustrative purposes only.


S&P Global (China) Ratings Enters China’s Domestic Bond Market

S&P Global (China) Ratings entry into China’s domestic bond market is a longer-term initiative that will develop over the next three to five years

Shadow banking: 16%

Bank loans: 70%

Equity financing: 4%

Bond financing: 11%

(as of March 2017)

China’s Onshore Bond Market(percent) (as of 12/31/2018)

Foreign bond investors 2.3%

Domestic bond investors 97.7%

Total $12.5 trillion

spgchinaratings.cn

S&P Global (China) Ratings is authorized to rate issuers and issuances from:

Corporates

Financial institutions

Structured finance

Panda bonds

China’s long-term strategic plan includes developing the country’s capital markets and attracting foreign investors. To support this, the government opened its financial sector to international credit rating agencies. Previously foreign companies were only permitted to take a noncontrolling minority stake in a domestic Chinese credit rating agency.

After studying this significant market opportunity and meeting with issuers, investors, and regulators, S&P Ratings (China) Co., Ltd., a wholly-owned, indirect subsidiary of S&P Global, applied for a license to operate as a credit rating agency. In January 2019, that application was granted and S&P Ratings (China) Co., Ltd. became the first wholly foreign-owned credit rating agency licensed to operate domestically in China. The new rating agency operates in China under the brand name S&P Global (China) Ratings and 标普信评.

Headquartered in Beijing, S&P Global (China) Ratings will employ its own ratings’ standards, criteria, and methodology, with compliance and control standards derived from those of S&P Global Ratings. S&P Global (China) Ratings began its new operation with its first chief executive officer and more than 40 ratings employees. It is also working with S&P Global Market Intelligence to meet the needs of fixed income investors interested in China.

S&P Global (China) Ratings has adopted a national scale rating in recognition of the size and diversity of China’s domestic capital markets, applying a methodology relevant to those markets.

China’s bond market is one of the largest in the world

Approximately 11% of financing in China is through bond financing

Foreign investors currently own 2% of China’s onshore bond market

China’s Domestic and Offshore Bond MarketsChina’s offshore bond market: S&P Global Ratings currently rates offshore bonds for more than 400 companies in China, including issuances in Renminbi and other major currencies. S&P Global (China) Ratings will work with these same issuers towards rating their domestic Chinese debt.

China’s domestic onshore bond market is one of the largest bond markets in the world. S&P Global (China) Ratings’ entry represents a significant opportunity given high demand for more transparency and greater granularity around credit risk in the Chinese market. S&P Global views this as a longer-term initiative as China’s debt market develops over the next three to five years.

U.S. FranceU.K.JapanChina

41.3

12.5(1) 12.55.7 4.5

Total Bonds OutstandingDomestic and International Debt Securities

(dollars in trillions) (as of 12/31/2018)

Source: Bank for International Settlements(1) Domestic-only

Sources: Bloomberg, People’s Bank of China, and S&P Global Ratings estimates

Sources: Bloomberg and People’s Bank of China

https://www.spgchinaratings.cn/


Sustainable Finance: Entity-Level ESG Evaluation

The ESG Profile

Reflects the entity’s current activities and starts by applying the outputs from the S&P Global Ratings ESG Risk Atlas to the entity’s sector and regional footprint. Our company analysis reflects S&P Global Ratings’ view of the extent to which the company has mitigated these risks.

The Preparedness Assessment

Evaluates the entity’s capacity to anticipate and adapt to a variety of long-term plausible disruptions.

Final ESG Score

Provides a relative overall ESG Score which allows comparison with other entities globally, including sector peers.

S&P Global Ratings ESG EvaluationS&P Global Ratings launched ESG Evaluation in April 2019 based on extensive and direct client engagement to develop a product that meets needs of issuers, investors, and intermediaries. ESG Evaluation is for companies looking to help their investors gain a better understanding of company strategy, purpose, and management quality. The forward-looking ESG Evaluation is a cross-sector, relative analysis—at the entity level—of a company’s ability to operate successfully now and in the future.

S&P Global Ratings’ team of analysts are knowledgeable in the entity’s business and industry and utilize public and private data, as well as from Trucost, for their analysis. The analysis is grounded in how ESG factors could affect stakeholders and potentially lead to a material direct or indirect financial impact on the entity. The final output is a fact-based reflection of the entity’s sustainability efforts.

The ESG Evaluation combines quantitative and qualitative analysis and considers both the near-term and longer-term ESG risks and risk mitigants for the subject company/entity

ESG Profile FactorsEnvironmental

Greenhouse Gas Emissions

Social

Workforce & Diversity

Governance

Structure & Oversight

Safety Management

Code & ValuesWaste & Pollution

Land Use Communities Cyber Risk & Systems

Water Use Transparency & Reporting

Customer Engagement

ESG Profile Development

Risk Atlas

Region and sector macroanalysis

Entity-specific analysis by credit

analyst and ESG team

In-person assessment

Analytical judgement

Diagnostic

> > >Meeting Adjustments

+ = ESG EvaluationPreparednessESG Profile

See footnotes on page 21

600

1,800

1,200

$2,400

Investment Grade $ 1,613 $ 1,803 $ 1,745 $ 1,636 $ 1,518■ AAA ■ AA ■ A ■ BBB

Speculative Grade 188 322 436 633 689■ BB ■ B ■ CCC+ and below

Total Global $ 1,801 $ 2,125 $ 2,182 $ 2,269 $ 2,207

Global Corporate Debt Maturities by Rating Category (2019–2023) (dollars in billions)

’23’22’21’20’19

Global Corporate Debt Maturities by Grade (2019–2023)

Speculative Grade: 21%$2.3 trillion

Investment Grade: 79%$8.3 trillion

$10.6 trillion

Global Corporate Debt Maturities by Region (2019–2023) (dollars in billions)

Europe: 39% $4,079

Other Developed Markets: 11% $1,123

Emerging Markets: 7% $741

United States: 44%$4,641

$10.6 trillion

Aerospace and defense

Automotive

Capital goods

Consumer products

CP&ES

Diversified

FP&BM

Health care

High technology

Home/RE

Media and entertainment

Metals, mining, and steel

Oil and gas

Retail/restaurants

Telecommunications

Transportation

Utility

Maturing Debt by Major Nonfinancial Sectors (dollars in billions)

$200 $300$100 $400 $500 $600 $700

■ Investment Grade ■ Speculative Grade

Note: CP&ES - Chemicals, packaging, and environmental services. FP&BM - Forest products and building materials. Home/RE - Homebuilders/real estate companies


The amount of rated corporate debt scheduled to mature from January 1, 2019 to the end of 2023 has risen by 5% since the beginning of 2018

Global Corporate Debt Maturities Through 2023Annual estimate published by S&P Global Fixed Income Research

S&P Global Fixed Income Research estimates that slightly more than $10.6 trillion in corporate debt rated by S&P Global Ratings is scheduled to mature globally from the beginning of 2019 through the end of 2023 (see charts below).

United States: $4,641 billion

Speculative Grade: 2%$110 billion

Investment Grade: 23%$1,046 billion


Speculative Grade: 28%$1,282 billion

Financial

Nonfinancial





Financial

Nonfinancial

Europe: $4,079 billion

Speculative Grade: <1%$1 billion

Investment Grade: 57%$643 billion



Financial

Nonfinancial

Other Developed Markets: $1,123 billion





Financial

Nonfinancial

Emerging Markets: $741 billion


Notes for pages 20 and 21:

Includes financial and nonfinancial corporate issuers’ bonds, loans, and revolving credit facilities that are rated by S&P Global Ratings. Excludes debt instruments that do not have a global scale rating. Foreign currencies are converted to U.S. dollars at the exchange rate on close of business on 1/1/2019

Data as of 1/1/2019


Source: S&P Global Fixed Income Research, “Credit Trends: Global Refinancing Study—Rated Corporate Debt Maturing Through 2023 Nears $11 Trillion,” February 5, 2019

Estimated Global Schedule for Maturing Corporate Debt (2019–2023)

(dollars in billions) 2019 2020 2021 2022 2023 Total

United States

FinancialInvestment grade $ 223 $ 223 $ 233 $ 177 $ 190 $ 1,046

Speculative grade 12 23 19 33 23 110

NonfinancialInvestment grade 348 447 493 447 470 2,203

Speculative grade 88 157 253 362 422 1,282

Total United States $ 671 $ 849 $ 998 $ 1,018 $ 1,105 $ 4,641

Europe

FinancialInvestment grade $ 437 $ 454 $ 406 $ 445 $ 388 $ 2,130


NonfinancialInvestment grade 271 330 293 295 232 1,421


Total Europe $ 753 $ 858 $ 789 $ 895 $ 783 $ 4,079

Other Developed Markets

FinancialInvestment grade $ 162 $ 152 $ 134 $ 107 $ 88 $ 643

Speculative grade – – – 1 – 1

NonfinancialInvestment grade 76 75 76 59 54 341


Total Other Developed Markets $ 249 $ 249 $ 240 $ 200 $ 186 $ 1,123

Emerging Markets

FinancialInvestment grade $ 50 $ 64 $ 49 $ 31 $ 32 $ 226


NonfinancialInvestment grade 46 57 61 77 66 307


Total Emerging Markets $ 128 $ 169 $ 155 $ 156 $ 134 $ 741

Total Global $ 1,801 $ 2,125 $ 2,182 $ 2,269 $ 2,207 $ 10,584

■ S&P Rated Volume $1,478 $1,273 $1,095 $1,497 $1,532 $1,649 $1,755 $1,754 $1,923 $1,510

Rated Volume $1,567 $1,421 $1,244 $1,676 $1,742 $1,936 $2,096 $2,056 $2,357 $1,934

# of Rated Issues 11,784 14,419 10,649 12,999 11,192 11,092 12,587 12,736 11,548 9,318

600

1,200

1,800

$2,400

Rated U.S. Debt Market (a, b, c, d, e)

S&P Global Ratings penetration rate as a % of rated dollar volume

78%

82%85%84%85%88%89%

88%90%

94%

’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 ’17 ’18

230

115

345

$460

U.S. Corporates: Financial Services (c)


95%

97%97%95%96%

96%96%

94%89%

99%

■ S&P Rated Volume $ 334 $ 214 $ 199 $ 304 $ 317 $ 391 $ 391 $ 387 $ 424 $ 351

Rated Volume $ 338 $ 239 $ 212 $ 317 $ 328 $ 407 $ 410 $ 399 $ 439 $ 368

# of Rated Issues 354 595 465 551 534 512 470 473 493 415

’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 ’17 ’18

225

450

675

$900

U.S. Corporates: Industrials (c)


98%

98%99%

98%

98%98%99%

98%97%99%

■ S&P Rated Volume $ 510 $ 448 $ 464 $ 619 $ 641 $ 655 $ 782 $ 738 $ 806 $ 533

Rated Volume $ 516 $ 460 $ 473 $ 626 $ 651 $ 667 $ 798 $ 744 $ 821 $ 547

# of Rated Issues 711 717 659 832 818 725 670 667 801 514

’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 ’17 ’18

Rated U.S. Debt Market: 2018 Dollar Volume by New-Issue Category (a, b, c, d, e)

Financial Services

ABS

RMBS STRUCTURED

GOVERNMENT

CORPORATES

CDOs

CMBS

Industrials

Municipals

Sovereigns

$368

$ 229

$ 67

$ 280

$ 69

$ 547

$ 46

$ 327

Total: $1.9 Trillion


Sources: Thomson Reuters, Harrison Scott Publications, S&P Global Ratings

Sources: Thomson Reuters, S&P Global Ratings


U.S. Debt MarketDollar volume by new-issue category

In 2018, S&P Global Ratings rated approximately 78% of the $1.9 trillion of addressable debt issued in the U.S. market compared with 82% in 2017. Rated debt issuance by dollar volume in the U.S. decreased by 18% from 2017 to 2018 while the number of issues was down approximately 19%.

The rated debt market is a component of the total debt market and includes only the debt securities issued with a rating. The rated U.S. debt market is primarily comprised of six new-issue categories (shown below): (1) Corporates (Industrials and Financial Services), (2) Municipals, (3) Sovereigns, (4) Mortgage-Backed Securities (Residential and Commercial), (5) Asset-Backed Securities, and (6) Collateralized Debt Obligations.

Notes: Annual figures; dollar volume in billions; data by domicile of issuer/assets


Historical percentages calculated based on unrounded figures

Data as of 1/31/2019, and subject to revision to reflect final deal information


(a) Excludes municipal student loans and private placements

(b) Excludes confidential transactions

(c) Includes Rule 144a (private placements), MTN takedowns, convertibles, and preferred stocks. Excludes private placements (except Rule 144a issues), retail notes,

commercial paper, and all agency issues

(d) Excludes agency deals. Includes home equity loans

(e) Excludes asset-backed commercial paper and letters of credit

125

250

375

$500

U.S. Municipals (a)


84%83%85%

88%86%87%

88%

89%91%

82%

■ S&P Rated Volume $ 410 $ 417 $ 284 $ 348 $ 290 $ 287 $ 328 $ 354 $ 348 $ 269

Rated Volume $ 451 $ 469 $ 324 $ 401 $ 338 $ 327 $ 384 $ 427 $ 414 $ 327

# of Rated Issues 10,217 12,392 9,020 10,891 9,017 8,794 10,425 10,538 8,862 6,935

’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 ’17 ’18

25

50

75

$100

U.S. Commercial Mortgage-Backed Securities (CMBS) (b)


40%

24%25%31%39%

25%23%40%44%

39%

■ S&P Rated Volume $ 3 $ 7 $ 7 $ 11 $ 32 $ 27 $ 23 $ 16 $ 33 $ 27

Rated Volume $ 7 $ 18 $ 32 $ 47 $ 82 $ 89 $ 95 $ 67 $ 83 $ 69

# of Rated Issues 25 41 37 66 107 127 127 105 123 121

’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 ’17 ’18

28

14

42

56

$70

U.S. Residential Mortgage-Backed Securities (RMBS) (b, d)


18%11%18%15%48%61%49%21%

57%

85%

■ S&P Rated Volume $ 45 $ 19 $ 3 $ 11 $ 18 $ 16 $ 7 $ 6 $ 5 $ 12

Rated Volume $ 53 $ 33 $15 $ 22 $ 30 $ 33 $ 47 $ 35 $ 51 $ 67

# of Rated Issues 135 130 48 73 90 103 127 76 100 150

’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 ’17 ’18

75

225

150

$300

U.S. Collateralized Debt Obligations (CDOs) (b)


43%

54%37%

52%79%98%93%97%

63%

46%

■ S&P Rated Volume $ 4 $ 29 $ 24 $ 53 $ 70 $ 70 $ 40 $ 58 $ 124 $ 130

Rated Volume $ 6 $ 30 $ 26 $ 54 $ 89 $ 136 $ 108 $ 108 $ 286 $ 280

# of Rated Issues 24 127 78 167 206 292 247 273 630 611

’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 ’17 ’18

60

120

180

$240

U.S. Asset-Backed Securities (ABS) (b, e)


65%63%66%

70%68%68%

62%77%

86%64%

■ S&P Rated Volume $ 124 $ 100 $ 77 $ 122 $ 118 $ 147 $ 125 $ 121 $ 141 $ 145

Rated Volume $ 144 $ 130 $ 124 $ 178 $ 173 $ 210 $ 190 $ 192 $ 216 $ 229

# of Rated Issues 186 244 232 309 304 345 332 352 370 428

’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 ’17 ’18

25

50

75

$100

U.S. SovereignsS&P Global Ratings penetration rate as a % of rated dollar volume

93%85%

87%

90%83%92%

94%94%94%

94%

■ S&P Rated Volume $ 48 $ 39 $ 37 $ 29 $ 46 $ 56 $ 58 $ 73 $ 40 $ 43

Rated Volume $ 51 $ 42 $ 39 $ 31 $ 50 $ 68 $ 64 $ 84 $ 47 $ 46

# of Rated Issues 132 173 110 110 116 194 189 252 169 144

’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 ’17 ’18


Sources: Harrison Scott Publications, S&P Global Ratings Sources: Harrison Scott Publications, S&P Global Ratings

Sources: Thomson Reuters, S&P Global Ratings Sources: Harrison Scott Publications, S&P Global Ratings


Rated EMEA Debt Market: 2018 Dollar Volume by New-Issue Category (a, b, c, d)

Financial Services

CDOs

CMBS

STRUCTURED

GOVERNMENT

CORPORATES

Covered Bonds

ABS

Industrials

Sovereigns/IPF

RMBS

Total: $1.9 Trillion

$551

$ 69

$ 5

$ 266

$ 52

$ 454

$ 55

$ 445

Rated EMEA Debt Market (a, b, c, d)


’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 ’17 ’18

■ S&P Rated Volume $ 2,048 $ 1,600 $ 1,494 $ 1,554 $ 1,595 $ 1,613 $ 1,298 $ 1,381 $ 1,405 $ 1,395

Rated Volume $ 2,300 $ 1,905 $ 1,920 $ 1,889 $ 1,910 $ 1,995 $ 1,668 $ 1,716 $ 1,798 $ 1,898

# of Rated Issues 3,145 4,001 3,878 4,242 4,540 4,583 3,814 3,143 3,229 3,246

625

1,250

1,875

$2,500

73%78%80%78%

81%84%82%78%84%

89%

EMEA Corporates: Industrials (b)


’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 ’17 ’18

■ S&P Rated Volume $ 565 $ 277 $ 272 $ 455 $ 431 $ 460 $ 352 $ 446 $ 426 $ 397

Rated Volume $ 615 $ 302 $ 300 $ 484 $ 465 $ 485 $ 382 $ 473 $ 470 $ 454

# of Rated Issues 687 460 478 726 684 633 526 517 602 496

160

320

480

$640

91%94%92%95%93%94%

91%92%

92%

87%

EMEA Corporates: Financial Services (b)


’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 ’17 ’18

■ S&P Rated Volume $ 803 $ 555 $ 514 $ 498 $ 495 $ 555 $ 464 $ 435 $ 442 $ 459

Rated Volume $ 884 $ 639 $ 593 $ 603 $ 568 $ 677 $ 549 $ 498 $ 541 $ 551

# of Rated Issues 1,361 1,823 1,507 1,677 1,978 1,961 1,583 1,169 1,122 1,021

225

450

675

$900

82%87%85%82%

87%83%87%87%

91%

83%


EMEA (Europe, Middle East, Africa) Region Debt Market Dollar volume by new-issue category

In 2018, S&P Global Ratings rated approximately 73% of the $1.9 trillion of addressable debt issued in the EMEA region market, which includes Europe, the Middle East, and Africa, compared with 78% in 2017. Rated debt issuance by dollar volume in the region increased by approximately 6% from 2017 to 2018 while the number of issues was essentially flat.

The rated debt market is a component of the total debt market and includes only the debt securities issued with a rating. The rated EMEA debt market comprises six new-issue categories (shown below): (1) Corporates (Industrials and Financial Services), (2) Sovereigns/International Public Finance (IPF), (3) Mortgage-Backed Securities (Residential and Commercial), (4) Asset-Backed Securities, (5) Collateralized Debt Obligations, and (6) Covered Bonds.






(a) Excludes confidential and repo transactions

(b) Includes Rule 144a (private placements), MTN takedowns, convertibles, and preferred

stocks. Excludes private placements (except Rule 144a issues), retail notes, and commercial paper

(c) Excludes asset-backed commercial paper and letters of credit

(d) Includes home equity loans




EMEA Sovereigns/International Public Finance (IPF)S&P Global Ratings penetration rate as a % of rated dollar volume

’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 ’17 ’18

■ S&P Rated Volume $ 487 $ 381 $ 393 $ 417 $ 525 $ 443 $ 309 $ 338 $ 378 $ 365

Rated Volume $ 518 $ 411 $ 431 $ 455 $ 590 $ 534 $ 399 $ 433 $ 462 $ 445

# of Rated Issues 705 931 805 1,128 1,248 1,395 986 709 703 575

150

300

450

$600

82%78%

77%

83%83%

89%

92%91%93%

94%

82%

EMEA Residential Mortgage-Backed Securities (RMBS) (a, d)


’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 ’17 ’18

■ S&P Rated Volume $ 8 $ 74 $ 89 $ 35 $ 13 $ 21 $ 28 $ 43 $ 28 $ 28

Rated Volume $ 11 $ 101 $ 119 $ 60 $ 26 $ 40 $ 50 $ 68 $ 45 $ 55

# of Rated Issues 7 48 46 53 43 58 57 68 49 64

60

30

90

$120

61%64%

57%54%54%

48%59%

75%74%

74% 51%

EMEA Commercial Mortgage-Backed Securities (CMBS) (a)


’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 ’17 ’18

■ S&P Rated Volume $ 2 $ 3 $ 2 $ 3 $ 4 $ 2 $ 3 $ 0 $ 2 $ 3

Rated Volume $ 2 $ 6 $ 4 $ 4 $ 10 $ 4 $ 5 $ 4 $ 4 $ 5

# of Rated Issues 6 10 3 6 12 9 11 4 6 14

71%1%66%66%

47%47%

38%74%

42%42%

72%60%

6

3

9

$12

EMEA Asset-Backed Securities (ABS) (a, c)


’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 ’17 ’18

■ S&P Rated Volume $ 10 $ 20 $ 26 $ 35 $ 35 $ 33 $ 25 $ 21 $ 21 $ 25

Rated Volume $ 15 $ 38 $ 49 $ 53 $ 53 $ 65 $ 51 $ 54 $ 47 $ 52

# of Rated Issues 42 92 93 95 80 119 95 104 91 79

20

40

60

$80

45%40%49%49%51%51%65%66%

53%52%

63%

48%

EMEA Collateralized Debt Obligations (CDOs) (a)


’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 ’17 ’18

■ S&P Rated Volume $ 1 $ 6 $ 3 $ 5 $ 12 $ 11 $ 13 $ 20 $ 28 $ 18

Rated Volume $ 2 $ 7 $ 4 $ 6 $ 14 $ 26 $ 21 $ 29 $ 57 $ 69

# of Rated Issues 9 35 17 25 43 53 48 66 149 154

36

18

54

$72

50%68%

59%41%41%83%83%73%90%65%

25%

EMEA Covered Bonds (a)


’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 ’17 ’18

■ S&P Rated Volume $ 172 $ 284 $ 194 $ 106 $ 81 $ 89 $ 103 $ 77 $ 80 $ 100

Rated Volume $ 252 $ 400 $ 420 $ 226 $ 183 $ 165 $ 211 $ 158 $ 173 $ 266

# of Rated Issues 328 602 929 532 452 355 508 506 507 843

110

220

330

$440

46%49%49%49%54%54%44%

47%

46%

71%

68%

37%





Rated Asia Debt Market (a, b, c, d, e)


’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 ’17 ’18

■ S&P Rated Volume $ 250 $ 233 $ 235 $ 271 $ 322 $ 411 $ 356 $ 410 $ 470 $ 399

Rated Volume $ 403 $ 377 $ 405 $ 492 $ 515 $ 661 $ 527 $ 640 $ 743 $ 681

# of Rated Issues 1,234 1,257 1,191 1,338 1,558 1,702 1,429 1,690 1,818 1,772

200

400

600

$800

63%64%

67%67%62%62%

63%55%58%62%62%

59%

Asia-Pacific Structured Finance (a, c, d)


’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 ’17 ’18

■ S&P Rated Volume $ 43 $ 49 $ 63 $ 25 $ 54 $ 45 $ 38 $ 47 $ 55 $ 49

Rated Volume $ 59 $ 62 $ 93 $ 100 $ 100 $ 95 $ 87 $ 104 $ 117 $ 157

# of Rated Issues 226 205 241 243 479 467 454 415 463 425

40

80

120

$160

47%45%44%44%47%47%

54%

25%

69%78%72% 31%

Rated Asia-Pacific Debt Market: 2018 Dollar Volume by New-Issue Category (a, b, c, d, e)

Financial Services

CDOs

CMBS

STRUCTURED

GOVERNMENT

CORPORATES

Covered Bonds

ABS

Industrials

Sovereigns/IPF

RMBS

Total: $681 Billion

$ 241

$ 0

$ 1

$ 28

$ 50

$ 200

$ 78

$ 82

Asia-Pacific Corporates (Industrials and Financial Services) (b)


’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 ’17 ’18

■ S&P Rated Volume $ 180 $ 167 $ 146 $ 226 $ 243 $ 309 $ 271 $ 299 $ 351 $ 294

Rated Volume $ 265 $ 242 $ 222 $ 313 $ 330 $ 401 $ 335 $ 388 $ 507 $ 442

# of Rated Issues 788 785 675 832 847 921 718 950 1,016 1,001

135

270

405

$540

69%77%

81%81%77%77%

74%72%

66%69%68%

67%


In 2018, S&P Global Ratings rated approximately 59% of the $681 billion of addressable debt issued in the Asia-Pacific market compared with the 63% in 2017. Rated debt issuance by dollar volume in the region decreased approximately 8% from 2017 to 2018 while the number of issues declined by 3%.

The rated debt market is a component of the total debt market and includes only the debt securities issued with a rating. The rated Asia-Pacific debt market comprises six new-issue categories (shown below): (1) Corporates (Industrials and Financial Services), (2) Sovereigns/International Public Finance (IPF), (3) Mortgage-Backed Securities (Residential and Commercial), (4) Asset-Backed Securities, (5) Collateralized Debt Obligations, and (6) Covered Bonds.

Asia-Pacific Region Debt MarketDollar volume by new-issue category





Notes for page 26:

(a) Excludes confidential and repo transactions

(b) Includes Rule 144a (private placements), MTN takedowns, convertibles, and preferred stocks. Excludes sovereign issuers, private placements (except Rule 144a issues), retail notes, commercial paper, and all agency issues

(c) Excludes asset-backed commercial paper and letters of credit

(d) Includes home equity loans

(e) Includes sovereigns



Sources: Harrison Scott Publications, S&P Global Ratings

Global Corporates Average Cumulative Default Rates by Rating, 1981–2018 (a)

10%

0%

20%

30%

40%

50%

60%

1 2 3 4 5 6 7 8 9 10 11 12 13 14 2015 16 17 18 19

CCC/C

B

BB

BBB

A

AA

AAA

Time horizon (years)

0.35%

Global Structured Finance Average Cumulative Default Rates by Rating, 1976–2018 (a, b)

10%

0%

20%

30%

40%

50%

60%

70%

80%

90%

1 2 3 4 5 6 7 8 9 10Time horizon (years)

CC

CCC

B

BB

BBB

A

AA

AAA

3.69%


Source: S&P Global Ratings, “Default, Transition, and Recovery: 2018 Annual Global Structured Finance Default Study and Rating Transitions,” March 28, 2019, Table 2

Source: S&P Global Ratings, “Default, Transition, and Recovery: 2018 Annual Global Corporate Default Study and Rating Transitions,” April 9, 2019, Chart 4

(a) Average cumulative default rates are derived by calculating “conditional on survival” marginal default rates from experiences of each static pool and time horizon

(b) Includes only one security per transaction that S&P Global Ratings originally rated ‘AAA’

How S&P Global Ratings’ credit ratings performThe charts to the right show the default rates experienced for each rating category.

For example: The five-year cumulative default rate for corporate issuers rated AAA has been 0.35%, or fewer than four defaults for every 1,000 ratings.

The five-year cumulative default rate for AAA-rated structured finance issues has been 3.69%.

S&P Global Ratings’ data shows that lower-rated issuers and securities have generally exhibited higher default rates

S&P Global Ratings’ Track Record: Standing the Test of Time

What are credit ratings?Credit ratings express an opinion about the ability and willingness of an issuer to meet its financial obligations in full and on time. They also speak to the credit quality of an individual debt issue and the relative likelihood that the debt issue may default.

Corporations or governments often raise funds for projects—such as the construction of a factory, school, or highway or a green energy project—by issuing debt securities like bonds. Our credit ratings can help them communicate their creditworthiness—or the risk of investing in these securities— potentially expanding their universe of investors.


S&P Global Ratings’ Loan & Recovery Ratings

Ratings DiversificationCredit risk assessment, pricing, and structuring for syndicated loans

S&P Global Ratings’ loan ratings are widely used in the loan market for credit risk assessment, pricing, and structuring of syndicated loans. A loan rating is the issue-specific rating assigned to a borrower’s syndicated loan. These ratings give the market an important recovery assessment that helps to improve the distribution of syndicated loan new-issuance.

Recovery ratings are used in a variety of ways in the collateralized loan obligation (CLO) market. They are an integral input into S&P Global Ratings’ CLO analysis and ratings. CLO asset managers use recovery ratings as a key consideration in trading decisions as it relates to their portfolio parameters. CLO investors use recovery ratings to monitor the overall expected recovery of their portfolio of leveraged loans.

S&P Global Ratings has assigned ratings on syndicated loans since 1996 across different sectors and borrower types, including investment-grade, speculative-grade, infrastructure, and project-finance loans. S&P Global Ratings currently rates syndicated loans of more than 2,100 borrowers totaling close to $32 trillion.

Loan Ratings Process In the loan ratings process, S&P Global Ratings reviews revolving lines of credit, first-lien term loans, second-lien term loans, and other subordinated debt. Leveraged loan ratings are accompanied by a full recovery rating analysis based on S&P Global Ratings’ ratings scale and methodology.

The table below illustrates how a recovery rating is used to adjust the Issuer Credit Rating, the anchor rating in the loan process, for an issuer with a speculative-grade issuer credit rating.

Why Clients Obtain Loan Ratings Efficient and transparent market pricing

Increased liquidity in the secondary loan market

Investor base broadened to new classes of lenders

Quick assessment of the effect of a loan rating resulting from contemplated changes to a borrower’s capital structure

Improved terms and efficiencies with vendors

Third-party, unbiased recovery assessment in a heightened regulatory and credit risk environment

Recovery Rating

Recovery Description

Nominal Recovery

Issue-Level Rating Notched from Issuer Credit Rating

1+Highest expectation for full recovery

100% +3 notches

1 Very high recovery

90%–100% +2 notches

2 Substantial recovery

70%–90% +1 notch

3 Meaningful recovery

50%–70% 0 notches

4 Average recovery

30%–50% 0 notches

5 Modest recovery

10%–30% -1 notch

6 Negligible recovery

0%–10% -2 notches

Note: Recovery ratings are capped in certain countries to adjust for reduced creditor recovery prospects in these jurisdictions. The table applies to 23 countries designated as Jurisdiction A by S&P Global Ratings.

S&P Global Ratings’ loan ratings offer an industry-wide recognized gauge of creditworthiness that facilitates increased liquidity in the secondary loan market

95

190

285

$380 Q4

Q3

Q1

S&P Global Ratings: Bank Loan Ratings Revenue(dollars in millions)

’10

$94

’11

$117

’12

$147

’13

$208

’14

$235

’15

$206

’16

$262

’17

$366

’18

$99

$121

$73

$87$380

Q2

Data based on bank loans outstanding as of 4/1/2019. Spans corporate, financial institutions, insurance, and non-U.S. Excludes revolving bank facilities.


Global Leveraged Loan Issuance Volume Reached Multi-Year Highs in 2017–2018 Amid Rising Interest Rates

Annual Maturities for Leveraged Loans Continue Rising Through 2023

Leveraged Loans Represent a Growing Share of U.S. Corporate Issuance

Trends in the Leveraged Lending Market

Total leveraged loan issuance was more than $700 billion in 2018

■ U.S. ■ Europe

600

400

200

$800

Leveraged Loan Issuance Volume Syndicated in U.S. and Europe(dollars in billions)

’00 ’01 ’02 ’03 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 ’17 ’18

225

150

75

$300

Annual Maturities for Leveraged Loans(dollars in billions)

’19 ’23’22’21’20

$32 $92 $148 $256 $294

U.S. Leveraged Loans and Speculative-Grade Bonds (dollars in billions) (years ended December 31)

525

350

175

$700

80

75

70

85%

’18’17’16’15’14’13

■ Leveraged loans $607 $528 $423 $482 $650 $623

■ Speculative- grade bonds $276 $242 $209 $188 $237 $142

Leveraged loan % of total 69% 69% 67% 72% 73% 81%

Loans/Bonds % of Total

Sources: Thomson; LCD: an offering of S&P Global Market Intelligence; and S&P Global Fixed Income Research

Notes: Estimate as of 1/1/2019. Includes term loans that are rated ‘BB+’ or lower by S&P Global Ratings

Source: S&P Global Fixed Income Research

Note: Includes institutional and pro rata loan issuance, rated and unrated

Sources: LCD: an offering of S&P Global Market Intelligence; S&P Global Fixed Income Research

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