Credit rating agencies are upgrading hundreds of billions of dollars of US corporate debt, in a partial reversal of the downgrades at the outset of the pandemic that reflects the strong rebound in profitability across much of corporate America.

Roughly $361bn of higher-rated, investment grade bonds have been upgraded in the past two months, including a record $184bn in June, according to data from Bank of America.

The brisk pace shows credit rating agencies such as S&P Global, Moody’s and Fitch believe the economic recovery spurred by vaccine rollouts has made corporate debt piles more manageable. It also reflects the abundant liquidity and low borrowing costs available to many companies, in part thanks to monetary stimulus from the Federal Reserve.

“I don’t think you could have anticipated the vaccine, the economic growth, and the strong availability of really low-rated debt,” said Christina Padgett, senior…

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