Credit Trends: Europe: Decline In Downgrade Ratio Fails To Provide Succor Jul 03
- ID: 1710774
- July 2003
- Region: Europe
- Standard & Poors
Even though the number of downgrades per upgrade declined in second-quarter 2003, there is not yet any clear-cut improvement in European credit quality. Credit quality among financial and nonfinancial businesses remains under pressure, constrained by a poor earnings environment, uncertainty, and tepid economic performance. Moreover, a previous frenzy of mergers and acquisitions has saddled European issuers with considerable debt, which they are unable to lower either by raising equity or by making asset sales. The growth differential between Europe-defined to include the industrialized countries of Western Europe-and the U.S. will persist, with GDP growing by approximately 1% in Europe compared with a 4% range in the U.S. The proportion of issuers with a negative bias-27% vs. 23% a year ago-attests...
Companies mentioned in this report are: Cable & Wireless Ltd.,Northumbrian Water Ltd.,Koninklijke Ahold N.V.,Gerling-Konzern Allgemeine Versicherungs-AG,Sol Melia S.A.,Invensys PLC,ABB Ltd.,HeidelbergCement AG,Rhodia,Tereos S.A.,ThyssenKrupp AG
Standard and Poors RatingsXpress Credit Research provides in-depth coverage of international corporates, financial institutions, insurance companies, utilities, sovereigns and structured finance programs. RatingsXpress Credit Research lets users determine the credit rating of holdings and identify key factors underlying an issuer's creditworthiness, distinguishes the different risk exposures for new and existing deals, and provides an understanding of how their analysts interpret key regulatory, political and environmental events and their economic impact.
Research Type: Commentary
Criteria articles describe the thought process and methodology Standard & Poor's analysts use in determining ratings. These commentary pieces discuss both the quantitative (economic and financial) and qualitative (business analysis and caliber of management) aspects of the analysis, as well as legal issues.
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