US HG Credit Ratings Review: 2Q26 and 1H26 recap: Back on the upswing in what is already the highest quality market in over a decade

Research evidence excerpt

US HG Credit Ratings Review: 2Q26 and 1H26 recap: Back on the upswing in what is already the highest quality market in over a decade

Nathaniel Rosenbaum, CFA AC North America Credit Research

(1-212) 834-2370 08 July 2026 J P M O R G A N

nathaniel.rosenbaum@jpmorgan.com

June by S&P, led by strong forward bookings for 2026 and early 2027, which provide

good revenue and cash flow visibility. S&P also expects modest capacity growth this

year to aid credit metric improvement despite geopolitical disruptions. The largest

Fallen Angel in 2Q was CNC, which was also downgraded in April by S&P due to

external structural challenges in its Medicaid and Affordable Care Act marketplace

product segments, which will likely result in elevated earnings risks and weak near-term

credit metrics. This brings the 1H26 tally to $8bn of index eligible Rising Stars (and

$43bn overall) versus $25bn of Fallen Angels (and $33bn overall) i.e. Fallen Angels are

3x higher on an index-eligible basis.

Looking ahead, in conjunction with the J.P. Morgan credit research team, we anticipate

an additional $28bn of index eligible Rising Stars ($73bn total) in 2026/27 versus

$88bn of index eligible Fallen Angels ($146bn total) that could be downgraded

from HG to HY. Our sector analysts have identified 8 issuers with $11bn of index-

eligible debt that are likely to be upgraded from HY to HG by YE26. Furthermore, we

expect another 10 issuers to be upgraded to HG in 2027, totaling $17bn of index-eligible

debt. The universe of potential Fallen Angels totals 5 issuers with $6bn of index-eligible

debt. As well, an additional 11 issuers are on the radar with $83bn of index-eligible debt

as a potential downgrades for 2027.

At the sector level, the largest drivers of our Rising Star candidates are Energy ($15bn)