April 6, 2011
Solvency II Implementation Looms, But European Insurers Still Face Uncertainty After Fifth Quantitative Impact Study
The European Insurance and Occupational Pensions Authority published its fifth Quantitative Impact Study (QIS 5). Significantly, 15% of Europe's insurers failed to cover their solvency capital requirement (SCR) and 5% failed to cover their minimum capital requirement. SCR coverage varies a great deal between countries, but in most more than 10% of insurers did not hold sufficient eligible net assets, known as "own funds," to cover the SCR.
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Credit FAQ: What Are Credit Estimates And How Do They Differ From Ratings?
Credit estimates are intended to provide solely to the requesting party an indication of our opinion regarding creditworthiness of an unrated company based on an abbreviated analysis. They are formulated from an abbreviated analysis and, generally, do not include all of the aspects of a standard ratings analysis. For these reasons, a credit estimate is not intended to be a substitute for a credit rating. This article attempts to clarify how credit estimates differ from credit ratings.
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Multimedia
creditmatters tv
Regulated Entities Remain The Bright Spot In The U.K.'s Whole Business Securitization Market
Roneil Thadani, Director
The recent economic environment has been difficult for many sectors backing U.K. whole business securitizations, most notably the tenanted pub sector. However, transactions backed by regulated businesses have largely been the exception. In this CreditMatters TV segment, Standard & Poor's Director Roneil Thadani discusses some notable recent developments, specifically in the Punch Taverns and BAA deals.For a limited time, this podcast is available on S&P CreditMatters for the iPhone and iPod touch. Download the free app.
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Global Issuers
Stress In Corporate America: A Positive Start To 2011 For The Three Most Stressed Sectors
In light of sluggish consumer demand and some uncertainty about economic and credit market conditions, the media and entertainment, oil and gas, and retail/restaurants sectors were the most troubled sectors as of March 31. These sectors had the highest levels of risk among our lists of distressed companies, weakest links, and potential bond downgrades. There are 87 companies in these three sectors that meet at least one of the criteria.
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Corporations
Sunoco Inc. Ratings Remain On Watch Negative Pending Planned SunCoke Spin Off
The planned spin-off of SunCoke would materially weaken Sunoco Inc.'s business risk profile because it would result in a more concentrated portfolio of assets in refining, retail marketing, logistics, and chemicals. The SunCoke business provides some operating stability because it generates fairly steady cash flow and has good growth prospects. Sunoco will most likely focus more on increasing its retail marketing and logistics businesses, rather than its refining business.
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Corporations
Vivendi Affirmed At 'BBB/A-2' On SFR Minority Buyout; Outlook Stable
The affirmation follows Vivendi's announcement of its €7.75 billion buyout of minority interests in France's No. 2 fixed and mobile telecoms services provider, SFR. Vivendi, which currently owns 56% of SFR, expects to complete the transaction by mid-year, after regulatory approval. Vivendi's full ownership of SFR would improve cash flow circulation, reduce financial complexity, boost discretionary cash flow, and reduce tax-related risks. Vivendi's liquidity should remain adequate post transaction, assuming current funding plans are successfully completed beforehand.
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Corporations
Top 10 Investor Questions For Global Shipping In 2011
Global shipping companies face testing times over the next 12 months. Political unrest in the Middle East and North Africa and the after-effects of the earthquake and tsunami in Japan are adding to the inherent risks of operating in this very competitive industry that's sensitive to supply and demand imbalances. As carriers of the vast majority of global trade, shipping companies are exposed to economic conditions.
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Sovereigns
Republic of Austria Ratings Unaffected By Reclassification Of Deficit And Debt
The ratings on Austria are unaffected by its recent reclassification of expenditures and debt. The reclassification has led to a slight increase of general government deficit and debt figures from 1995 on. The widened official perimeter of general government is consistent with our criteria and will, in our view, not jeopardize cross-sovereign comparisons. The envisaged changes are small and do not reveal any information that we did not already have.
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Sovereigns
Unsolicited 'BBB-' Rating On India Affirmed On Continuing Fiscal Consolidation; Outlook Stable
The ratings on India reflect the country's good economic growth prospects and its fairly strong external position. Positive investment trends further underpin company ratings, with foreign direct investment and portfolio investments covering a large share of the current account deficit. Nevertheless, the country's weak fiscal profile and structural problems temper its strengths. Structural problems not only constrain efficiency but also preclude a large share of the population from benefiting from the country's rising prosperity.
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Corporations
DISH Network Corp. Ratings Unaffected By Blockbuster Win
The ratings and outlook on satellite TV provider DISH Network Corp. were not immediately affected by being the winning bidder for the assets of Blockbuster. The size of this transaction, coupled with the agreement to acquire bankrupt DBSD North America for $1.4 billion, is manageable. However, it is unclear as to the strategic rationale for the transaction and how it may meaningfully improve either DISH's ability to reach new customers or expand its video-on-demand business.
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Insurance
Berkshire Hathaway Inc. And Insurance Subsidiaries Ratings Unaffected By Departure Of NetJets' CEO
The ratings on Berkshire Hathaway Inc. (BRK) are unaffected by the unexpected departure of David Sokol, chairman and CEO of BRK's NetJets Inc. subsidiary and chairman and former CEO of MidAmerican Energy Holdings Co. Mr. Sokol was widely considered to be one of the four internal candidates that the company's board had identified as a potential successor to Warren Buffett as the CEO of BRK. Still, this leaves the company with at least three other viable internal candidates.
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