The S&P 500 hit a new record this week when it briefly climbed above 1,900 on Tuesday, and the credit profiles of its rated constituents remain stable. The credit measures of the index’s constituents are stronger than those of U.S. companies in general. In contrast to U.S. corporate ratings overall, the majority (387) of the companies in the index are rated investment grade (‘BBB-‘ and higher). Through the first four months of 2014, more than twice as many companies in the index were upgraded than were downgraded, even as downgrades have outnumbered upgrades for U.S. companies overall. However, the U.S. lost one of its four ‘AAA’-rated companies in April after Automatic Data Processing Inc. (ADP) was downgraded to ‘AA’ from ‘AAA’. Despite the Federal Reserve’s moves to taper its bond purchases, bond yields have remained low and companies have actively issued debt, though at a slightly slower rate than last year. While the index constituents’ total debt has risen, the increase in leverage has been partially offset by rising cash and earnings and rating outlooks remain stable. More than 80% of the index’s rated constituents have a stable rating outlook, and the rating outlooks for the remaining companies are nearly equally split between potential upgrades and potential downgrades.