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ARCHIVE | Criteria | Corporates | General: Identifying Rating Triggers and Other Contingent Calls on Liquidity Mar 02 Product Image

ARCHIVE | Criteria | Corporates | General: Identifying Rating Triggers and Other Contingent Calls on Liquidity Mar 02

  • ID: 1871035
  • March 2002
  • Standard & Poors

Abstract
Standard & Poor's has been working on ways to identify for investors corporate exposure to contingent calls on liquidity. The concern regards any provision in financing or operating agreements, but particularly ratings triggers, that could cause a liquidity crisis. Without these provisions, a company that faces adversities may be able to stabilize itself and ultimately improve. Indeed, there are hundreds of non-investment grade companies that operate normally and finance normally-and, certainly, the majority of them are not expected to default. Yet, if, for example, certain lenders are allowed to demand repayment or terminate credit facilities merely upon a change to non-investment grade, the result could be a crisis that puts the company on the brink of default. (See "Playing Out...

Companies mentioned in this report are: European Union,United States of America (Unsolicited Ratings)

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Note: Product cover images may vary from those shown

European Union,United States of America (Unsolicited Ratings)

Note: Product cover images may vary from those shown
Note: Product cover images may vary from those shown

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