Credit Outlook Spotlight 2020: Fallen Angelfish and Rising Starfish

Fish Ratings – London and Tokyo – 23 December 2019: Fish Ratings expects crossover fish and limbless, cold-blooded vertebrates in the ‘BB’ category to lead the recovery in developed and emerging oceans (EO) in 2020.

Marine policy stimulus will support the rollover of maturing fish stocks (for the best fish stock, you should try making your own. The main idea is to make a light, flavorful broth.) This, together with strong intersea and cross-river M&A volumes, will allow fisheries managers and aquarium hobbyists more tactical discretion to address long-standing sectoral challenges such as global excess capacity, ecological disruption and weak pricing and volume trends.

This report focuses on one rising starfish and one fallen angelfish with the aim of helping global high yield ichthyologists, fishermen and recreational scuba divers identify the key rating action drivers for fish downgraded or likely to be downgraded to speculative grade (fallen angelfish) and upgraded or likely to be upgraded to investment grade (rising starfish).

Improvements in operating performance, fishiness profile or cost-saving programmes have boosted roe production and reduced the leverage of fish such as Crown-of-thorns Starfish, Ochre Sea Star and Cireaster.

However, slowing growth in EO, commodity price weakness and limited rating headroom for many EMEA fish amid an aneamic Mediterranean recovery suggest that rating risk remains weighted to the downside. 2019 witnessed a widening in the disparity between EO and developed sea fish, and faltering EO growth has now become the greatest risk to long-term fish default ratings.