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Canadian Ratings Performance 2005: Scarcity Of Defaults Persists Apr 06
Standard & Poors, April 2006
Abstract
The analysis of rating transition and default activity undertaken in this study updates Standard & Poor's Ratings Services' annual review of credit quality trends in Canada. The purpose of this review is to assess the rank ordering of ratings to judge the degree of correspondence between bankruptcy remoteness and credit quality. Ratings are assigned on a prospective basis, that is, to provide a forward-looking opinion of the creditworthiness of obligors. Ratings are most useful, therefore, if they consistently and accurately predict the probability of default. This study compares the performance of ratings assigned to Canadian companies by Standard & Poor's relative-to-observed default activity. The principal findings are as follows: Credit quality continued to stabilize in Canada in 2005, with about...
Companies mentioned in this report are: Ford Motor Co.,Motors Liquidation Co. (fka General Motors Corp.),Air Canada,Domtar Inc.,Laidlaw International Inc.,Calpine Corp.,Tembec Inc.,World Color Press Inc.,Abitibi-Consolidated Inc.,Millar Western Forest Products Ltd.,Stratos Global Corp.,Secunda International Ltd.,Paramount Resources Ltd.,Sears Canada Inc.,Royal Group Technologies Ltd.,North American Energy Partners Inc.,Jean Coutu Group (PJC) Inc.,MAAX Holdings Inc.
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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