MARC Ratings today published its 2024 Annual Corporate Default and Ratings Transition Study which tracks corporate ratings assigned by the rating agency since its inception in 1996 through 2024.

In 2024, MARC Ratings’ corporate portfolio recorded no defaults. The rating agency has continued to demonstrate proficiency in predicting defaults and consistently exhibited effectiveness in ranking credit risk through its ratings. For the 1998-2024 period, MARC Ratings’ long-term rating accuracy ratio improved to 75.6% (1998-2023 period: 74.4%). This suggests an improvement in MARC Ratings’ capability to assess relative default risk effectively. Overall, MARC Ratings’ five-year ratings accuracy was 99.1%, compared to 98.8% in 2023.

Meanwhile, rating migration remained active, with six downgrades and four upgrades, compared to four downgrades and three upgrades in 2023, raising the downgrade-to-upgrade ratio to 1.5x (2023: 1.3x). Consequently, the rating drift declined to -2.1% (2023: -1.1%), though this remains better than the pre-pandemic average (2015–2019) of -4.8%. With the increased rating migration in 2024, the ratings stability rate declined to 89.8% (2023: 92.3%) but remained above its long-term average (2000-2024) of 87.9%. Nonetheless, the ratings stability rate remained relatively strong, supported by the prevalence of highly rated issuers within MARC Ratings’ corporate portfolio, which typically demonstrate greater business resilience during challenging periods.

Moving forward, we anticipate stable ratings trajectories for corporates in MARC Ratings’ rating universe, on the back of sustained economic growth and stable monetary conditions.