穆迪-全球-信贷市场-信贷展望：当前事件的信贷影响-20180614-17页_878kb

Credit Outlook Summary

Core Content

This document provides an overview of credit implications stemming from various current events across different sectors. It outlines the credit impact of corporate transactions, infrastructure developments, banking reforms, and public finance decisions. The analysis is conducted by Moody's Analytics, focusing on how these events affect financial metrics, capital structures, and credit ratings of the involved entities.

Main Points

Corporates

• Envision Healthcare's planned sale to KKR is credit negative due to potential increases in leverage and reduced interest coverage.
  • The transaction is expected to close in Q4 2018.
  • KKR's funding method is unclear, but Envision's adjusted debt/EBITDA is projected to rise sharply.
  • Envision had a strategic review initiated in October 2017, with the sale being the most leveraged option.
  • The company continues to face weak patient volume trends and declining margins.
• Genworth Financial's acquisition by China Oceanwide is credit positive as it increases the likelihood of the deal closing.
  • CFIUS has cleared the transaction of national security concerns.
  • COH is expected to contribute $1.5 billion to improve Genworth's debt ladder and reduce financial leverage.

Infrastructure

• Thames Water's leakage settlement is credit negative.
  • The company was found to have excessive water leakage, resulting in penalties and revenue loss.
  • The settlement includes £65 million in refunds and £54 million in accelerated penalties.
  • The company faces a 130-basis-point reduction in allowed returns and tougher cost allowances in the AMP7 regulatory period.
  • Leakage levels are expected to remain above targets until 2019-20.

Banks

• HSBC's new business plan is credit positive.
  • The plan involves $15-$17 billion in investments over two years, focusing on internal growth, efficiency, and customer service.
  • The bank is targeting a return on tangible equity of more than 11% by 2020 and a CET1 ratio of more than 14%.
  • The plan builds on HSBC's long-term goals of expanding its international network and focusing on wealth and retail businesses.
• France's countercyclical capital buffer is credit positive.
  • The buffer will increase capital requirements for French bank exposures by 25 basis points, starting in July 2019.
  • It aims to curb excessive credit growth and maintain high credit standards.
  • The measure will affect EU banks with significant exposure to France, particularly those in the UK, Germany, and Spain.

US Public Finance

• New York City's federal consent decree is credit negative.
  • The decree requires the city to provide $1 billion in capital support over four years, limiting fiscal flexibility.
  • NYCHA, the housing authority, is mandated to improve conditions in public housing, which will require ongoing funding.
  • The agreement locks in baseline support through 2027 and includes emergency funding for the state of New York.

Key Information

• Envision Healthcare is a US-based physician staffing company with a revenue split of 84% from physician staffing and 16% from ambulatory surgical centers.
• USG Corporation is a US-based manufacturer of building materials, with a debt/EBITDA ratio of 2.5x in Q1 2018, expected to worsen post-acquisition.
• Thames Water is a UK-based water utility, facing significant penalties and revenue loss due to water leakage, with a target leakage reduction of 15% in AMP7.
• Genworth Financial is a US-based insurance holding company, with a debt maturity schedule that includes $1.5 billion due between 2020 and 2021.
• HSBC is a global banking group, with a new strategy emphasizing internal growth and efficiency, and targeting higher profitability and capital ratios.
• France's countercyclical buffer targets systemically important banks with high exposure to leveraged corporates, aiming to reduce credit risk.
• New York City faces increased capital commitments to support NYCHA, which operates public housing for 5% of New Yorkers.

Sector-Specific Credit Impacts

Sector	Key Event	Credit Impact	Notes
Corporates	Envision Healthcare sale to KKR	Credit Negative	Increased leverage and reduced interest coverage
Corporates	Genworth Financial acquisition by COH	Credit Positive	Increased likelihood of deal closure and debt reduction
Infrastructure	Thames Water leakage settlement	Credit Negative	Revenue loss and penalties, affecting interest coverage
Banks	HSBC's new business plan	Credit Positive	Focus on growth, efficiency, and profitability
Banks	France's countercyclical capital buffer	Credit Positive	Increased capital requirements, reduced credit risk
US Public Finance	NYC consent decree for NYCHA	Credit Negative	Increased capital commitments, reduced fiscal flexibility

Conclusion

The document highlights the credit implications of several key events across different sectors, with a focus on how these events affect financial metrics, capital structures, and overall credit quality. While some transactions and policies are credit positive, others are credit negative, primarily due to increased leverage, reduced profitability, or mandatory spending commitments. The analysis provides insights into the potential credit impacts for investors and stakeholders in these sectors.