The latest annual issue of Moody’s liquidity study of EMEA [“Europe, Middle East and Africa”] companies from 2009 to 2018 makes for interesting reading, with the rating agency noting the number of its Baa-rated companies and their reported debt has risen significantly over the period.
Total outstanding debt rose to almost $2 trillion in the 2018 liquidity report from $1.3 trillion in 2009, while the number of Baa-rated companies nearly doubled to 303 from 160.

While Baa-rated companies' debt has accounted for the largest share of the total debt of rated EMEA companies since 2009, Moody’s said the proportion of total debt has not changed significantly and was at 41% in 2018 versus 36% in 2009.
Richard Morawetz, Senior Credit Officer and Vice President at Moody’s, said: "Baa-rated firms have less room for manoeuvre to remain investment grade in the face of a downturn. However, at this time we forecast only a slowdown in economic growth.
“In addition, a significant portion of debt is within defensive sectors such as utilities and telecommunications, which are more resilient to a potential turn in the cycle."
Sovereign actions on Russia were the biggest catalyst for EMEA corporate debt moving in and out of investment grade over the past decade.
Of the 29 EMEA companies rated Baa3 in Moody's 2009 liquidity study that continue to be rated presently, 25 have either retained or regained their investment-grade status in the interim, highlighting the strength of their underlying creditworthiness.