Despite a strong recovery from the March 23 lows, the U.S. stock market indexes and the economy as a whole are much worse off than just 45 days earlier. Skyrocketing trends in jobless claims and overall unemployment at the same time that stores are closed is wrecking the economy. There are few job openings, and much of the country has been ordered to work from home and stay at home. This is a very difficult time for many companies trying to navigate through an instant recession that caught most completely by surprise.

24/7 Wall St. already tracks many sell-side analyst ratings, but the downgrades from credit ratings agencies usually come with far higher implications for a company. Worse credit ratings tends to translate to higher borrowing costs, and that can have an impact on the interest and terms that companies will have when it comes to accessing short-term liquidity via credit lines and when they have to issue long-term debt.

Standard & Poor’s, Moody’s and Fitch are the three major credit ratings agencies. Credit ratings can show the underlying credit metrics and financial health of a company far more than daily equity ratings changes from Bank of America, Citigroup, Goldman Sachs and so on. Credit ratings changes are currently being seen more on the downside due to the overwhelming negative effects of the broader COVID-19 economy.

The major agencies have issued multiple credit ratings downgrades and negative credit ratings views Monday afternoon through Tuesday morning.

BlackRock Capital Investment Corp. (NASDAQ: BKCC) was surging with the market on Tuesday, but a ratings action from Fitch late on Monday took its credit rating down deeper into junk territory as it went down to BB− from BB+ in that call. Its ratings were also left with a Rating Watch Negative status that could bring more downgrades ahead. BlackRock Capital Investment traded up over 20% at $2.30 on Tuesday, with a mere $158 million market cap. That is against a 52-week range of $1.47 to $6.30. The company was formerly known as BlackRock Kelso Capital, and it is taxed as a business development company.

Century Aluminum Co. (NASDAQ: CENX), which has lost close to two-thirds of its equity value from last year, saw S&P downgrade its credit rating deeper into junk territory to CCC+ and it remains on CreditWatch Negative in the outlook. With a mere $350 million market cap, Century Aluminum has total liabilities of $825 million, while it has posted net losses for the past two fiscal years. S&P warns of weak market conditions and refinancing risks.

EQM Midstream Partners L.P. (NYSE: EQM) was downgraded To BB− at S&P, and the Outlook Negative status implies that it could be downgraded deeper into junk territory. EQM Midstream is a master limited partnership that still has a $14.00 unit price, and its distribution (income plus capital return, a dividend equivalent yield of sorts) still screens out as 11%.

Magnolia Oil & Gas Corp. (NYSE: MGY), which still has a $1 billion market cap with just a $4.15 stock price, was maintained with a B+ rating at S&P. That is in junk bond territory, but S&P revised its stats to Outlook Negative as its credit metrics look meaningfully weaker than in prior forecasts.

New Residential Investment Corp. (NYSE: NRZ) was downgraded in the long-term issuer rating from Moody’s to B3 from B2 on Monday afternoon, and its ratings are on review for further downgrade on liquidity concerns. The mortgage real estate investment trust was up 30% at $4.55 during Tuesday’s market rally, but the shares were above $16 as recently as March 5. To put it mildly, mortgage payments being skipped and an inability to rectify missed payments is bad news for mortgage REITs and their dividends. Moody’s said that, while the ratings downgrade reflects the company’s recent liquidity stress, the initiation of a ratings review for further downgrade was brought on by New Residential’s ongoing liquidity challenges.

PNM Resources Inc. (NYSE: PNM), a $3.3 billion electric utility covering parts of New Mexico and Texas, was downgraded by S&P to BBB from BBB+ based on the expectations that the company’s weak historical financial measures will remain under the ratings agency’s downgrade threshold over the next two years. S&P also revised the Texas/New Mexico Power financial risk profile to significant from intermediate as its higher capital spending to support the expansion in transmission will lead to weaker financial measures. With a share price of $42.00, PNM Resources generates a 2.93% dividend yield for its common holders, and its shares are down 25% from their highs.

Ralph Lauren Corp. (NYSE: RL), which has rallied with the market despite a negative COVID-19 business update, was put on CreditWatch Negative at S&P as the rapid drop in consumer spending and store closures around the country will bring significantly lower operating results. S&P has an A− issuer credit rating, so that is not close to junk ratings at this time. Ralph Lauren’s stock price was up 12% at $77.00, with close to a $5.7 billion market cap, but that is down from a high of $133.63. Ralph Lauren currently has a 5% dividend yield, and the current $2.75 annualized dividend per share is against normalized earnings of more than $7.00 per share.

StoneMor Inc. (NYSE: STON), an owner and operator of cemeteries and funeral homes, has seen its shares plunge. S&P lowered its credit rating deeper into junk territory with a new CCC− rating based on liquidity risks and debt covenant risks. This stock has been in decline for several years, and a share price of $0.57 probably tells enough of the story here.

Tivity Health Inc. (NASDAQ: TVTY), which provides fitness and nutrition solutions along with the Nutrisystem and South Beach Diet brands, was downgraded to B at S&P and it remains on CreditWatch Negative. The ratings agency sees Tivity posting lower earnings due to its own underperformance and to pandemic pressure. With a market cap of $310 million, after nearly a 20% gain to $6.35, Tivity was a $23 stock as recently as mid-February. Tivity’s total liabilities of almost $1.4 billion come with long-term debt of almost $1.05 billion, versus total assets of $282 million or so after backing out $654 million in good will and another $689 million in intangible assets.

YRC Worldwide Inc. (NASDAQ: YRCW), a trucking company that has been under pressure for two years, has seen its credit rating lowered to CCC+ based on weaker operating prospects. Unfortunately, S&P also still has a negative outlook that could bring an additional downgrade. At $1.35 a share, YRC Worldwide has a mere $50 million market cap, against total liabilities of $2.27 billion.

Tuesday’s top equity analyst upgrades and downgrades included BHP, Electronic Arts, Gilead Sciences, Immunomedics, KeyCorp, Peloton Interactive, Shopify, Sunnova Energy, Take-Two Interactive, Walt Disney and many more.

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