20170710-穆迪服务-Credit_Outlook_38页_743kb

Credit Outlook Summary

Core Content

This document outlines the credit implications of various corporate, infrastructure, banking, insurance, asset management, and sovereign events as analyzed by Moody's Analytics. It provides insights into how these events affect the financial health and credit ratings of the involved entities.

Main Points

Corporates

• Owens Corning: The company repurchased $284 million in notes, reducing interest costs and extending maturities. This is a credit positive move, though it doesn't significantly change credit metrics. Total adjusted debt is expected to remain around $3.0 billion, with EBITA/interest expense projected at 6.5x and leverage at 2.1x by 2018.
• AK Steel's Acquisition of Precision Partners: A $360 million acquisition is credit positive, adding value-added products to AK Steel's portfolio and enhancing its position in the automotive industry. The transaction is expected to improve operating efficiencies and EBITDA margins.
• Telecom Argentina and Cablevision Merger: The merger creates Argentina's largest integrated telecom operator, with a credit positive impact. The merged entity is expected to have a strong market share in key services and a lower debt/EBITDA ratio.
• Rheinmetall's Government Contract: The €900 million contract for logistic vehicles is credit positive, as it boosts revenue and supports the recovery of Rheinmetall's defense business. The company is expected to reduce leverage to below 5x by 2019.
• Heidelberger Druckmaschinen: The conversion of 95% of its €60 million bond is credit positive, reducing debt and interest costs. However, its EBITA margins and FCF/debt ratios remain weak.
• CMA CGM's Port Terminal Sale: The $817 million sale of its Los Angeles terminal is credit positive, helping to deleverage and improve liquidity. The company is on track to meet its deleveraging goals by the end of 2017.
• Danone's Disposal of Stonyfield: The $875 million sale is credit positive, reducing debt and improving credit metrics. Danone expects its RCF/net debt ratio to decline to around 16% by the end of 2017.
• China Vanke's Acquisition of GITIC's Properties: The RMB55.1 billion acquisition is credit positive, enhancing China Vanke's land bank and market position in Guangzhou. The company is expected to partially fund the acquisition with debt, leading to a moderate increase in leverage.

Infrastructure

• Odessa Power Plant Sale: The sale is credit negative for ExGen Texas Power, as it reduces revenue and EBITDA.
• Electricite de France's Hinkley Point Power Plant: Cost overruns and potential delays are credit negative, impacting the company's financial performance.

Banks

• CIT Group's Sale of European Rail Leasing Business: This is a credit positive move, improving the company's capital structure.
• Lebanon's Byblos Bank: The European Investment Bank's long-term funding is credit positive.
• Turkish Banks' Wholesale Funding Reliance: This is a credit negative factor, indicating vulnerability to funding risks.
• Proposed Split of JSC Bank of Georgia: The split is credit positive, potentially improving the bank's financial flexibility.
• Hong Kong's Revised Bank Resolution Regime: This is a credit negative move, affecting bank operations and stability.
• Hatton National Bank's Rights Issuance: The capital boost is credit positive, enhancing the bank's financial position.
• Vietnamese Banks' Asset Quality: Improved asset quality is a credit positive development.

Insurers

• AXIS' Acquisition of Novae Group: This is a credit negative event, likely due to the acquisition's impact on financial stability.

Asset Managers

• Proposed Pan-European Pension Product: This is a credit positive development, offering opportunities for asset managers and insurers.

Sovereigns

• Austria's Debt-to-GDP Ratio: The ratio is expected to decline faster than anticipated, which is credit positive.
• Moldova's EU Macro-Financial Assistance: This is a credit positive development, providing financial support.
• Tanzania's New Mining Legislation: Discourages foreign investment, which is a credit negative factor.

Key Information

• Credit Positive Events: Owens Corning's note redemption, AK Steel's acquisition, Telecom Argentina and Cablevision's merger, Rheinmetall's government contract, Heidelberger Druckmaschinen's bond conversion, CMA CGM's port terminal sale, Danone's Stonyfield disposal, and China Vanke's acquisition of GITIC's properties.
• Credit Negative Events: Retreat from diesel and petrol fuels, European Commission's objection to Canon's merger with Toshiba Medical, and Hong Kong's revised bank resolution regime.
• Financial Metrics: EBITA, leverage, interest coverage, and FCF/debt ratios are key indicators analyzed in the document.
• Outlook: Most entities are projected to maintain or improve their credit metrics over the next 12-18 months, with some requiring further improvements to maintain their ratings.

Summary of Credit Implications

• Corporate Credit: Most acquisitions and asset sales are viewed as credit positive, while certain regulatory issues and market trends (like the shift to electric vehicles) are credit negative.
• Banking Sector: Improved asset quality and capital boosts are positive, whereas reliance on wholesale funding and regulatory changes are negative.
• Insurance and Asset Management: The proposed pan-European pension product is a credit positive for the sector.
• Sovereign Credit: Support from EU assistance is positive, while regulatory changes in Tanzania are negative.

Conclusion

The document highlights a mix of credit positive and negative developments across various sectors, emphasizing the importance of financial performance, regulatory compliance, and strategic decisions in shaping creditworthiness. Entities that are able to deleverage, improve operating efficiency, and adapt to market trends are generally viewed more favorably.