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Booming M&A And Shareholder-Friendly Actions Drive Global Credit-Quality Slide Jan 07
Standard & Poors, Jan 2007
Abstract
Hyper-liquidity, stoked by the heightened appetite for risk in global credit markets, appears ready to continue through 2007. With many borrowers, investors, and private-equity players growing increasingly comfortable with aggressive leverage, the current financial environment is powering a wave of leveraged mergers and acquisitions that likely will again reach record highs. Shareholder-friendly actions, such as large debt-financed stock repurchases and special dividends, also likely will set new records. Still, there will be a downside: Standard & Poor's Ratings Services expects many of these types of transactions to have a deleterious effect on credit quality, similar to what we saw last year. Barring unforeseen economic and financial speed bumps, this year's leveraged-financing activity likely will surpass the all-time records of 2006,...
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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