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Industry Report Card: Positive Global High-Technology Credit Trends Are Bucking The Weak Economic Environment Jun 08
Standard & Poors, June 2008
Abstract
Rating changes in the global high-technology sector during 2008 remain positive, despite the slowing economy and difficult credit market conditions. Given Standard & Poor's Ratings Services' expectations for continued moderate sector growth in 2008, we now expect the positive credit trends of 2007 to continue this year. Additionally, given credit market conditions, leveraged buyouts (LBOs) and dividend recaps are unlikely to have a negative impact on technology ratings, as they did in 2006 and 2007. Instead, we expect covenant issues to be the key negative factor for sector credit quality. Year-to-date rating changes are 1.8 to 1 favoring upgrades, compared with 1.3 to 1 for all of 2007. By year-end, the trend likely will be somewhat less favorable, given our...
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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