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Industry Report Card: U.S. Corporate Health Care Apr 05
Standard & Poors, April 2005
Abstract
It is time for increased circumspection regarding U.S. health care credits. Over the past few years, the generally improving cash flow of medical products and device companies and the favorable demand and reimbursement experienced by health service providers have helped to make debt issuers in these areas relatively attractive risks for yield-hungry creditors. While Standard & Poor's does not anticipate an early end to such conditions for U.S. corporate borrowers in these health care sectors, a tendency to increase debt leverage is raising the exposure of health care credits, particularly those at the lower end of the speculative-grade rating spectrum, to rising interest rates. Pharmaceutical company borrowers, meanwhile, continue to be susceptible to disappointing product developments. Through the first quarter...
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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