Global upgrades outpace downgrades for non-financial companies in Q2.

For the first time in 18 months, the trend in global corporate credit ratings turned positive in the second quarter, says Fitch Ratings.

In a new report, the rating agency reported that credit upgrades outnumbered downgrades in its global portfolio of non-financial companies for the second quarter — the first positive turn in six quarters.

“Upgrades were driven by stronger financial profiles and, in some cases, support provided by parent-subsidiary linkage and government-related entity considerations,” Fitch said — noting that most of the rating changes came in non-investment grade companies.

There were 71 upgrades in the quarter, compared with 47 downgrades, it reported — and the number of rating changes was also up notably, with 118 rating actions in the second quarter up from 78 in the first quarter of the year.

The utilities sector accounted for 19% of the total rating changes, followed by the natural resources and oil and gas industries, with a 14% share each — those three sectors contributed 49% of the upgrades in Q2, whereas downgrade activity was widely spread among various sectors, Fitch said.

While rating activity turned positive in the quarter, the distribution of global rating outlooks was unchanged in the quarter, it noted — with 81% of outlooks rated stable, 12% negative and 7% positive.

By region, the upgrade-to-downgrade ratio skewed most positive in the Asia-Pacific region (14 upgrades to just four downgrades), followed by North America (25 upgrades and 12 downgrades) and the Europe, Middle East and Africa region (22 upgrades versus 16 downgrades).

Latin America was the only region where downgrades outpaced upgrades, with 15 downgrades and 10 upgrades recorded in the quarter, Fitch said.