DBRS Morningstar: Corporate Finance 2021 Year-End Review and 2022 Outlook

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TORONTO — This commentary summarizes and reviews DBRS Morningstar’s corporate finance ratings activity in 2021 to provide an overview of key trends and their potential impact on ratings activity in 2022, including an industry snapshot by sector. Heading into 2021, DBRS Morningstar expected its downgrade-to-outgrade ratio to moderate from 2020, but remain above the historical 15-year moving average of approximately 3.00 times, based on continued uncertainty related to the coronavirus disease (COVID-19) pandemic, vaccine deployment/effectiveness, structural trends and subsequent macroeconomic conditions. Although we have been cautious and bracing for prolonged stress into 2021, the second year of the pandemic has been more positive than our initial expectations, as vaccine approvals and deployments, economic reopenings, continued of massive fiscal and monetary support and stimulus, and corporate agility and adaptability had a more positive impact on credit risk profiles than we had anticipated.

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“Going forward, the vast majority of trends that are currently stable reflect DBRS Morningstar’s view that companies are indeed moving toward post-pandemic normalcy,” said Anil Passi, Managing Director of Credit Ratings, Global Corporates at DBRS. Morningstar. “Revenue profiles have shown recovery or stabilization following economic reopenings, increased economic mobility and activity, and business adaptation and innovation amid structural trends. which have emerged or accelerated in 2020 and 2021. Accordingly, based on the current economic outlook, DBRS Morningstar is confident that business risk assessments and corresponding key credit metrics should remain stable and continue to transform stable trends in confirmations in 2022.”

To read the full report, click here: https://www.dbrsmorningstar.com/research/391903/corporate-finance-2021-year-end-review-and-2022-outlook

The DBRS Morningstar group of companies consists of DBRS, Inc. (Delaware, USA) (NRSRO, subsidiary DRO); DBRS Limited (Ontario, Canada)(DRO, subsidiary of NRSRO); DBRS Ratings GmbH (Frankfurt, Germany)(EU CRA, NRSRO subsidiary, DRO subsidiary); and DBRS Ratings Limited (England and Wales) (UK CRA, NRSRO subsidiary, DRO subsidiary). For more information on regulatory registrations, recognitions and approvals from the DBRS Morningstar group of companies, please see: https://www.dbrsmorningstar.com/research/highlights.pdf. The DBRS Morningstar group of companies is a wholly owned subsidiary of Morningstar, Inc. © 2022 DBRS Morningstar. All rights reserved. The information on which DBRS Morningstar ratings and other types of credit opinions and reports are based is obtained by DBRS Morningstar from sources DBRS Morningstar believes to be reliable. DBRS Morningstar does not verify the information it receives as part of the analysis process, and it does not and cannot independently verify such information in each instance. The extent of any factual investigation or independent verification depends on the facts and circumstances. DBRS Morningstar ratings, other types of credit opinions, reports and other information provided by DBRS Morningstar are provided “as is” and without representation or warranty of any kind. DBRS Morningstar hereby disclaims all representations or warranties, express or implied, as to the accuracy, timeliness, completeness, merchantability, fitness for a particular purpose, or noninfringement of this information. In no event shall DBRS Morningstar or its directors, officers, employees, independent contractors, agents, and representatives (collectively, DBRS Morningstar Representatives) be liable for (1) any inaccuracies, delays, loss of data, service interruptions, errors or omission or for any damages resulting therefrom, or (2) for any direct, indirect, incidental, special, compensatory or consequential damages resulting from any use of the ratings and rating reports or resulting from any error (negligent or otherwise) or any other circumstance or contingency within or outside the control of DBRS Morningstar or any representative of DBRS Morningstar, in connection with or relating to the obtaining, collection, compilation, analysis, interpretation, communication, publication or delivery of such information. No DBRS Morningstar entity is an investment adviser. DBRS Morningstar does not provide investment, financial or other advice. Credit ratings, other types of credit opinions, other analyzes and research issued or published by DBRS Morningstar are, and should be construed solely as, statements of opinion and not statements of fact with respect to creditworthiness, investments, advice financial or otherwise or purchase recommendations. , sell or hold securities. A report relating to a DBRS Morningstar rating or other credit opinion is neither a prospectus nor a substitute for the information compiled, verified and presented to investors by the issuer and its agents in connection with the sale of the securities. DBRS Morningstar may receive compensation for its ratings and other credit opinions from, among https://www.dbrsmorningstar.com/disclaimer/ others, issuers, insurers, guarantors and/or underwriters of debt securities. DBRS Morningstar is not responsible for the content or operation of third party websites accessible by hypertext or other computer links and DBRS Morningstar assumes no liability to any person or entity for the use of such third party websites. This publication may not be reproduced, retransmitted or distributed in any form without the prior written consent of DBRS Morningstar. ALL DBRS MORNINGSTAR RATINGS AND OTHER TYPES OF CREDIT OPINIONS ARE SUBJECT TO DISCLAIMERS AND CERTAIN LIMITATIONS. PLEASE READ THESE DISCLAIMERS AND LIMITATIONS ON https://www.dbrsmorningstar.com/about/disclaimer. ADDITIONAL INFORMATION ABOUT DBRS MORNINGSTAR RATINGS AND OTHER TYPES OF CREDIT OPINIONS, INCLUDING DEFINITIONS, POLICIES AND METHODOLOGIES, IS AVAILABLE AT https://www.dbrsmorningstar.com. Users may, through hyperlinks or other computer links, access websites operated by persons other than DBRS Morningstar. These hyperlinks are provided for convenience only and are the sole responsibility of the owners of such websites. DBRS Morningstar does not endorse the content, operator or operations of third party websites. DBRS Morningstar is not responsible for the content or operation of such websites, and DBRS Morningstar assumes no liability to you or any other person or entity for your use of third party websites.

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