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Industry Report Card: Global Packaging Defaults Could Rise In 2008, As Liquidity Tightens For Speculative-Grade Issuers Dec 07
Standard & Poors, Dec 2007
Abstract
Since the tightening of the credit markets began some months ago, liquidity concerns remain high in the global packaging sector, given that 65% of rated companies are in the 'B' and 'CCC' categories. Standard & Poor's Ratings Services expects tight liquidity and potential covenant violations to be the biggest stumbling blocks in 2008, and defaults likely will rise. A mitigating factor is that some companies were able to refinance their credit facilities with covenant-lite features, owing to the tremendous liquidity in the market before the credit squeeze began. This could delay their need to seek amendments, despite deterioration in operating performance. One positive note is that most packaging companies refinanced and pushed out debt maturities so that a relatively small...
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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