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Australia & New Zealand Food & Beverage Companies: Credit Quality Under Pressure Oct 01
Standard & Poors, Oct 2001
Abstract
(Following the publication of this article on Oct. 12, a number of rating actions have occurred in the New Zealand dairy sector, resulting in this replacement article.) Although the food and beverage industry is characterized by stable consumer demand and strong cash flows, rating actions in the industry have been significant, with two downgrades, two upgrades, and five CreditWatch placements in the past year. Further, the outlook for the industry generally is negative, with only seven out of the 15 rated companies on a stable outlook. These rating trends largely reflect transactions, principally debt-funded mergers and acquisitions, and the attendant risks of integrating new businesses into existing operations or poor performance. This trend is likely to continue as companies seek...
Companies mentioned in this report are: Allied Domecq Ltd.,Burns, Philp & Co. Ltd.,New Zealand Dairy Board,Coca-Cola Amatil Ltd.,National Foods Ltd.,Foster's Group Ltd.,Southcorp Ltd.,Lion Nathan Pty Ltd.,New Zealand Co-operative Dairy Co. Ltd. (The),Bonlac Foods Ltd.,Kiwi Co-operative Dairies Ltd.,Fonterra Co-operative Group Ltd.
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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