20170518-穆迪服务-Credit_Outlook_20页_421kb

Credit Outlook Summary - 18 MAY 2017

Core Content Overview

This document provides a summary of credit implications related to various events affecting corporate, infrastructure, and banking sectors, as well as sovereign credit ratings. The analysis is conducted by Moody’s Analytics, highlighting both credit positive and negative impacts of these developments on the financial health of the entities involved.

Corporates

Key Events and Impacts

• Thermo Fisher Scientific Inc. (Baa2 stable)

  • Planned Acquisition of Patheon: Credit negative due to increased leverage (debt/EBITDA will rise to 4.4x).
  • Financing: Approximately $5.2 billion in debt and $2 billion in equity.
  • Mitigation: Expected to reduce leverage to 3.0x by end of 2018 via earnings growth and debt repayment.
  • Strategic Fit: Uncertain, but the acquisition may help diversify revenue and enhance offerings in emerging markets.

• Marfrig Global Foods S.A. (B2 positive)

  • IPO of Keystone Unit: Credit positive, as it will reduce leverage.
  • Expected Proceeds: BRL2.2 billion (approx. $730 million).
  • Debt Reduction: If Marfrig uses BRL1.1 billion to pay down debt, its adjusted debt/EBITDA will drop to 3.1x.
  • Liquidity: Strong, but high leverage remains a concern.
  • Impact on Credit: A strong Brazilian real could hurt export revenues but lower interest expenses.

• Genting Singapore PLC (GENS, A3 stable)

  • Redemption of Perpetual Securities: Credit positive, as it will improve credit metrics.
  • Expected Impact: Debt/EBITDA will drop to 1.2x, and RCF/debt will rise to 42%.
  • Funding: Redeemed securities will be funded from cash and cash equivalents.
  • Rating Impact: No upgrade expected due to company's small scale and business concentration in Singapore.

Infrastructure

Key Event

• Korea Electric Power Corporation (KEPCO, Aa2 stable)
  • Temporary Closure of Coal-Fired Plants: Credit negative due to increased reliance on more expensive gas-fired generation.
  • Impact on FFO: Expected to reduce FFO by KRW60–70 billion in 2017 and KRW300–400 billion annually from 2018.
  • Liquidity: Adequate operating cash flow is expected under current oil price assumptions, limiting the need for excessive debt.
  • Government Policy: KEPCO is mandated to follow energy policy, including reducing coal and increasing gas and renewables.

Banks

Key Events and Impacts

• Attica Bank S.A. (Caa3 stable, caa3²)

  • Capital Shortfall Covered by AEDC: Credit positive.
  • Transaction Details: AEDC will purchase €806 million in junior notes and 80% of Thea Artemis.
  • Capital Gain: €70 million will be booked, improving CET1 capital ratio to 17%.
  • Capital Quality: A significant portion of CET1 is in the form of deferred tax assets, which are considered weak in quality.
  • Asset Management: The deal supports efforts to manage nonperforming loans and improve asset quality.

• Hong Kong Monetary Authority (HKMA)

  • Tighter Loan Requirements for Developers: Credit positive for banks.
  • New Financing Caps:
    • Land Acquisition: 40% (from 50%)
    • Construction Cost: 80% (from 100%)
    • Overall Cap: 50% (from 60%)
  • Risk Weight Increase: For developers with mortgage-to-equity ratios over 5%.
  • Impact on Banks: Expected to reduce lending to developers, but immediate capital impact is limited.
  • Market Share: Finance companies are gaining traction in mortgage lending, with a 16% market share in 2017.

• MUFG and Nomura Holdings

  • MUFG's Reorganization: Credit positive.
  • Nomura Real Estate Holdings Sale: Credit positive, as it would reduce leverage and improve financial flexibility.

Sovereigns

Key Event

• Austria
  • Early Elections Thwart Reform Efforts: The early elections may delay or prevent important reforms, potentially affecting the country's economic and fiscal policies, and thus its credit profile.

Key Takeaways

• Credit Negative Events:

  • Thermo Fisher's acquisition of Patheon.
  • SOCAR's exposure to IBA's debt restructuring.
  • Hong Kong property developers' reduced access to bank loans.
  • KEPCO's temporary coal plant closures and shift to gas.

• Credit Positive Events:

  • Marfrig's IPO of Keystone unit.
  • Genting Singapore's redemption of perpetual securities.
  • Attica Bank's agreement with AEDC.
  • HKMA's tightening lending rules to property developers, which is positive for banks.

• Overall Outlook:

  • The credit implications of these events are mixed, with some entities facing increased leverage and others benefiting from reduced debt or improved capital positions.
  • Stability and liquidity are key factors in determining credit outcomes.
  • Regulatory changes and strategic decisions play a crucial role in shaping credit profiles.

Summary of Ratings and Outlook

• Thermo Fisher Scientific Inc.: Baa2 stable
• Marfrig Global Foods S.A.: B2 positive
• SOCAR: Ba1 negative
• Genting Singapore PLC: A3 stable
• KEPCO: Aa2 stable
• Attica Bank S.A.: Caa3 stable, caa3²
• Hong Kong Banks: Mixed outlook (some with Aa2 negative, others with Baa1 stable)
• Austria: No specific rating mentioned, but reform efforts are hindered.

Conclusion

The document outlines a range of credit implications arising from corporate acquisitions, sovereign policy changes, and regulatory actions in the banking and infrastructure sectors. While some entities face credit challenges due to increased leverage or reduced liquidity, others benefit from debt reduction, improved capital positions, and regulatory support. The analysis underscores the importance of financial stability, regulatory compliance, and strategic management in shaping credit outcomes.