Credit cycle turning, say ratings firms

Ratings agencies are warning that a turn in the credit cycle could be on the horizon, with downgrades projected to outpace upgrades as soon as the third quarter. "We're now seeing more of a downside and downgrades coming through on cyclical sectors. It was pretty much expected from last year when we saw a trough in default rates, but we now see through the rating statistics that the best situation is now past," says Guillaume Menuet, senior economist at Moody's Investors Service.

Dramatic change