| Rationale |
Summary
- In 2023, MARC Ratings’ corporate portfolio recorded four rating downgrades and three upgrades, an increase compared to the preceding year, where two downgrades and two upgrades were recorded. Meanwhile, there was no rating default in 2023, in contrast to the two rating defaults in 2022. This led to an improved rating drift at -1.1% (2022: -2.2%), suggesting an overall improvement in credit quality.
- There were no defaults recorded in 2023, resulting in a decrease in the long-term average default rate for the 2000-2023 period to 1.7% (2000-2022: 1.8%). We expect default rates to remain low going forward based on the limited number of issuers positioned at the lower end of the rating spectrum.
- The ratings stability rate in 2023 declined slightly to 92.3% compared to 93.3% in 2022. The long-term average ratings stability rate for the period up until 2023 increased slightly to 87.9%, compared to the 2000–2022 average of 87.7%.
- Ratings accuracy improved in 2023 as no default was recorded and all defaults in 2022 came from the lowest non-default rating category of C. Over the long term (1998–2023), the ratings accuracy ratio came in at 74.4%, marginally higher than the 73.6% recorded in the 1998–2022 period.
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