20171221-穆迪服务-Credit_Outlook_20页_1004kb

Credit Outlook Summary

Core Content

This document provides a summary of credit implications of various corporate, bank, exchange, sovereign, and public finance events as of 21 December 2017. The analysis is conducted by Moody's Investors Service and includes ratings, outlooks, and financial implications of the events.

Main Points

Corporates

• Campbell's Acquisition of Snyder's-Lance:

  • Credit negative due to increased debt and leverage.
  • Expected to raise adjusted debt/EBITDA to 5.0x before synergies.
  • Strategic benefits include expanding its snack portfolio and adding leading brands.
  • Integration risks are high due to previous restructuring and simultaneous acquisition of Pacific Foods.

• Hershey's Acquisition of Amplify Snack Brands:

  • Credit negative due to increased leverage.
  • Expected to raise adjusted debt/EBITDA to 2.8x before synergies.
  • Adds product diversification but increases US market concentration.
  • Competes with PepsiCo's Frito-Lay unit in the ready-to-eat popcorn market.

• Total System Services' Acquisition of Cayan:

  • Credit negative due to increased leverage.
  • Expected to raise adjusted debt/EBITDA to 3.4x for 2017.
  • Strategic benefits include enhancing payment solutions and improving customer retention.
  • TSYS has a history of successful deleveraging post-acquisitions.

• Boeing's Failure to Win Delta Air Lines' Order:

  • Credit negative for Boeing due to lost revenue opportunity.
  • Estimated $500 million in operating profit lost over 3-4 years.
  • Airbus had a competitive advantage due to earlier launch and maintenance agreements.

• Increased Royalty Rate for Sirius XM:

  • Credit negative due to margin pressure.
  • Royalty rate will increase to 15.5% of gross revenue starting in 2018.
  • Expected EBITDA margin contraction of 300-350 basis points.
  • Sirius XM may offset costs through efficiency measures or price increases, though the latter risks customer attrition.

• Sibanye Gold Limited's Acquisition of Lonmin:

  • Credit positive due to diversification, increased scale, and no additional debt.
  • Expected to add significant PGM reserves and production.
  • Synergies of around $56 million annually by 2021.
  • Sibanye-Stillwater will become the world's second-largest PGM producer.

Banks

• Czech Banks:

  • Credit positive due to increased countercyclical capital buffer.
  • Buffer raised to 1.25% of risk-weighted assets, effective January 2019.
  • Aims to moderate credit growth and preserve capital amid strong loan growth.
  • May require banks to reduce risk-weighted assets or limit dividends.

• Saudi Arabia's Banks:

  • Credit positive due to government's private-sector stimulus program.
  • SAR72 billion stimulus will support private-sector growth and bank lending.
  • Expected to boost credit growth in 2018 by around 4%, particularly in real estate and SME lending.
  • The stimulus includes reduced fees for small businesses and improved financial reporting standards.

• Haitong International's Acquisition of Affiliate Assets:

  • Credit positive as it enhances investment banking operations in the UK and US.
  • Acquisition is small and not expected to have a material financial impact.
  • Part of a restructuring effort to separate commercial and investment banking activities.

Exchanges

• London Stock Exchange Group:
  • Credit positive due to shareholders retaining chairman.
  • Indicates continued confidence in leadership and strategic direction.

Sovereigns

• Argentina:
  • New pension law advances government's reform efforts.
  • May have long-term implications for public finances and social stability.

US Public Finance

• Military Housing:
  • Small increase in housing allowance is credit negative.
  • May impact affordability and demand for military housing, leading to financial strain.

Key Information

• Ratings and Outlooks:

  • Most acquisitions are credit negative due to increased leverage.
  • Sibanye Gold Limited's acquisition of Lonmin is credit positive due to diversification and operational synergies.
  • Some regulatory changes, such as the increase in the countercyclical capital buffer in the Czech Republic, are credit positive.

• Financial Impact:

  • Debt/EBITDA ratios are expected to rise for most acquirers, but management plans for deleveraging are in place.
  • The increased royalty rate for Sirius XM will impact margins, though the company is expected to manage the effect through cost-cutting.

• Strategic Considerations:

  • Acquisitions are evaluated based on their impact on leverage, operational synergies, and market positioning.
  • Regulatory and market conditions are also key factors in determining credit implications.

• Regional Focus:

  • The Czech Republic and Saudi Arabia are highlighted for their regulatory and stimulus-driven credit impacts.
  • The UK and US are important markets for Haitong International's expansion.

• Outlook for the Future:

  • The document notes that the next credit outlook will be published on 8 January 2018.
  • The impact of the new royalty rate and acquisitions will be closely monitored in the coming months.

Conclusion

The summary highlights a mix of credit positive and negative implications across various sectors and regions. While some acquisitions and regulatory changes pose financial risks, others offer strategic benefits and opportunities for growth. The analysis underscores the importance of leverage management, operational integration, and market dynamics in assessing credit risk.