20141208-穆迪服务-Credit_lmplications_of_Current_Events_53页_1mb

Credit Outlook Summary

Core Content

This document provides an analysis of credit implications related to various current events affecting corporations, banks, infrastructure utilities, and sovereign entities. It outlines rating changes, research highlights, and specific credit impacts from recent business decisions and policy reforms.

Main Points

Corporates

• Weatherford's $750 million cash sale of non-core business is credit positive as it allows the company to reduce debt, particularly short-term debt. The deal is neutral for Lubrizol, as its debt is guaranteed by its parent company.
• UK Stamp Duty Reform is credit positive for Taylor Wimpey and other homebuilders. The reform reduces tax liability for 98% of house buyers, enabling them to increase purchase prices and improve demand and pricing efficiency.
• Voith's purchase of KUKA stake is credit negative due to the weakening of its liquidity buffer and credit metrics. The transaction is expected to reduce Voith's retained cash flow/net debt ratio and may affect its ability to manage leverage.
• Telenor and TeliaSonera's merger in Denmark is credit positive for the companies and the sector, as it reduces competition and allows for more rational pricing. The joint venture is expected to generate efficiency gains and improve returns.

Infrastructure

• Cancellation of the South Stream pipeline is credit positive for European gas infrastructure utilities. It increases the likelihood of alternative gas import projects and benefits companies with LNG regasification capacity.
• Enagas, SNAM, and other gas utilities are expected to benefit from increased interconnection and reverse flow capacity in Europe, which may result from the South Stream cancellation and the need for alternative gas routes.

Banks

• American Savings Bank spinoff is credit positive, as it allows the bank to operate independently and improve its capital management. The spinoff reduces dividend payouts and improves regulatory capital ratios.
• Banreservas' increase in paid-in capital is credit positive, as it aims to strengthen the bank's capital base and support loan growth. However, there is a risk that the government may continue to use the bank for fiscal purposes.
• BBVA Chile's penalty against its broker unit is credit negative. The fine and associated provisioning charge will impact profitability, especially given slower loan growth expectations.

Asset Managers

• China's financial asset management regulatory overhaul is credit positive, as it may lead to more stable and transparent financial markets, benefiting asset managers.

Sovereigns

• Sweden's rejection of the government budget and the call for new elections is credit negative, as it may indicate political instability and affect public finances.
• Korea's 2015 budget supporting female participation in the labor force is credit positive, as it may enhance economic growth and long-term fiscal stability.

US Accounting

• US tax incentives worth $80 billion remain in effect despite recent crackdowns on corporate inversions, indicating continued support for certain industries.

Key Information

Rating Changes

• Downgraded entities include Chinos Intermediate Holdings, Cliffs Natural Resources, Occidental Petroleum, Japan, 12 Japanese government-related issuers, Kedr Bank, Nanyang Commercial Bank, and others.
• Upgraded entities include Aeroporti di Roma, Tenaga Nasional Berhad, Neuberger Berman, and various subprime RMBS and mortgage securities.

Research Highlights

• Published reports cover a wide range of topics including UK telecommunications, Brazilian corporates, North American covenants, Peruvian and Chilean retailers, German corporates, Chinese issuers, global asset prices, European infrastructure, and sovereign geopolitical risks.

Recent Events

• Weatherford's asset sales have been a strategic move to reduce leverage and improve credit quality, especially in a weakening OFS market.
• Telenor-TeliaSonera merger is expected to improve service quality and reduce price competition in the Danish market.
• Banreservas' capital increase is funded through retained earnings and is expected to support loan growth without further capital dilution.
• BBVA Chile's penalty will require a capital infusion to maintain its business license, which could strain profitability.

Conclusion

The document highlights a mix of credit positive and negative developments across various sectors. Corporate divestitures and policy reforms generally improve credit profiles, while certain penalties and acquisitions have a detrimental impact. The overall outlook for the OFS industry is negative due to declining oil prices, and the creditworthiness of European gas infrastructure utilities is expected to benefit from the cancellation of the South Stream pipeline. The document also notes the importance of capital management and regulatory changes in shaping the credit profiles of financial institutions.