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Credit Trends: Credit Perspectives: U.S. Telecom Services Credit Quality Showing A Higher Tone (Premium) Mar 08
Standard & Poors, March 2008
Abstract
The improving financial profile and cyclically defensive nature of the telecom services sector place it in a relatively better credit-risk position for 2008 than seen at the start of the previous downturn. On balance, credit quality is expected to hold steady, but investment-grade companies are subject to higher downgrade risks than their speculative-grade counterparts, which now account for 88.4% of the sector. Although some industry segments are mired in debt, and interest costs remain onerous, overall profit margins have improved. Some industry consolidation is still occurring, especially in the telecom sector, but the already high degree of industry consolidation, combined with less-than-favorable capital market conditions, limit merger and acquisition potential. Still, there are some notably weak players in telecom services...
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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