Summary

• In 2024, MARC Ratings’ corporate portfolio recorded increased rating migration with six downgrades, four upgrades and no default. This exceeds last year’s migration of four downgrades and three upgrades, raising the downgrade-to-upgrade ratio to 1.5x (2023: 1.3x). Consequently, the rating drift declined to -2.0% (2023: -1.1%), though it remains better than the pre-pandemic average (2015–2019), of -4.8%.
• With no default for two consecutive years, the long-term average default rate for the 2000-2024 period improved to 1.6% (2000-2023: 1.7%). 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 increased rating migration led to a decline in MARC Ratings’ ratings stability rate to 89.8%. The dominance of high-grade issuers helped to maintain the long-term average ratings stability at 87.9%.
• Ratings accuracy improved in 2024 as no default has been recorded since the last default in 2022, which came from the rating category of C. Over the long term (1998–2024), the ratings accuracy ratio came in at 75.6%, marginally higher than the 74.4% recorded in the 1998–2023 period.