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As U.S. Manufacturers Increase Capital Investment, Highly Leveraged Firms May Have More Ground To Make Up Apr 10
Standard & Poors, April 2010
Abstract
U.S. nonfinancial corporate issuers are starting to recover from the severe credit erosion of 2008 and 2009. Defaults have moderated and a more benign economic outlook has contributed to an increase in positive rating actions. Still, Standard & Poor's Ratings Services believes that the recovery may drag out in many sectors--even if the U.S. economy continues to expand and avoids a double-dip recession. For the broad range of capital-intensive manufacturing sectors and industries that depend heavily on these sectors, one potential complicating factor is the low capital spending that persisted during the downturn. This trend was most pronounced among speculative-grade rated companies (rated 'BB+' or lower). In our view, the ability to cut spending dramatically--in some cases nearly to minimal...
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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