20160222-穆迪服务-Credit_Implications_of_Current_Events_63页_2mb

CreditOutlook Summary

Core Content

This document provides a summary of credit implications related to various corporate, bank, insurer, and sub-sovereign entities, as analyzed by Moody's Investors Service. It includes news highlights, rating changes, and research insights on the creditworthiness of different sectors and companies.

Main Viewpoints

• Credit Positive Events: Include corporate debt exchanges, acquisitions, and strategic partnerships that improve financial metrics, reduce leverage, and enhance credit profiles.
• Credit Negative Events: Involve share buybacks, tax assessments, and high leverage scenarios that could increase financial risk and negatively impact credit ratings.
• Rating Actions: Moody's has downgraded several entities and upgraded others, reflecting changes in their financial health and credit risk.
• Financial Analysis: Includes detailed financial metrics, such as leverage ratios, EBITDA, and interest coverage, to assess creditworthiness.

Key Information

Corporates

• AT&T's Debt Exchange Offer:

  • AT&T Inc. (Baa1) will exchange $17 billion of DTV debt for its own notes, reducing structural subordination.
  • This transaction is credit positive, as it improves the standing of unsecured creditors.
  • If the exchange is successful, the amount of structurally senior debt will decrease from $36 billion to $20 billion.
  • DTV's revenue and EBITDA were approximately $33 billion and $8 billion in 2015, respectively.

• Rolls-Royce Dividend Cut:

  • A 50% cut in dividend is credit positive, reducing cash-absorptive operating profile.
  • The cut is consistent with the company's fiscally conservative approach and will help preserve credit quality.
  • It will save £120 million in 2016 and more than £200 million annually.

• CTI's Acquisition of Liguria Foods:

  • CTI Foods (B3) acquired Liguria Foods for $86 million, improving leverage, margins, and diversification.
  • Adjusted leverage improved to 6.2x from 6.8x, and interest coverage improved to 0.8x from 0.6x.

• Protection One's Acquisition of ADT:

  • The $15 billion deal is credit positive, creating a leader in the US residential alarm monitoring market.
  • Despite high leverage, the transaction is expected to drive operational improvements and cost synergies.
  • The combined company's attrition rate is expected to improve and leverage to decrease over time.

• Vodafone and Liberty Global Joint Venture:

  • The 50-50 joint venture in the Netherlands is credit positive, enhancing competitiveness and offering quadruple-play services.
  • The joint venture is expected to achieve €280 million in annual cost synergies.

• Baidu's Potential Sale of Qiyi Stake:

  • A proposed sale of 80.5% stake in Qiyi for $2.8 billion is credit positive, improving EBITDA margin by 5-6%.
  • The transaction allows Baidu to reduce capital outlay and benefit from Qiyi's user base.

• Crown Resorts' Tax Assessments:

  • Amended tax assessments of AUD362 million are credit negative, increasing financial leverage and posing a risk to its credit profile.
  • The payment could increase adjusted debt/EBITDA from 2.5x to 2.95x, approaching Moody's leverage guidance for a Baa2 rating.

Banks

• National Bank of Canada Credit Card Acquisition:

  • The acquisition is credit negative, potentially increasing leverage and risk.

• Mexico's Interest Rate Hike:

  • An unexpected rate hike is credit positive for banks, improving their net interest margins.

• Maple Bank Insolvency:

  • BaFin declared Maple Bank insolvent due to a tax evasion scheme, which is a credit negative event.

• Russia's Regulatory Requirements:

  • New regulations are credit positive for Russian banks, improving credit quality.

• DeltaCredit Bank's Foreign-Currency Mortgages:

  • Problem foreign-currency mortgages surged despite restructuring, a negative for DeltaCredit Bank.

• Ukrainian Banks' Refinancing Requirements:

  • Easing refinancing requirements are credit positive for Ukrainian banks.

• Sparebanken Sor and Getin Noble Bank:

  • Both have credit positive actions related to capital plans and rights issues.

• Saudi Central Bank's Loan-to-Deposit Ratio:

  • The increase in the maximum loan-to-deposit ratio is credit negative for banks.

Insurers

• Mexico's Interest Rate Hike:
  • The rate hike is credit positive for insurers and pension funds, improving their returns.

Green Bonds

• Apple's Green Bond:
  • Includes rigorous voluntary verification guidelines, indicating strong environmental and financial commitments.

Sub-sovereigns

• Tasmania's Budget Challenges:
  • Worsened by the extension of BassLink outage, posing a credit risk.

US Public Finance

• Chicago Public Schools Debt Service Deposit:
  • A credit positive event, indicating the city's ability to meet its obligations.

Credit in Depth

• Corporate Financial Reports:
  • Highlights key areas to analyze in financial reports, including changes in US GAAP for financial institutions.

Rating Changes

• Downgraded Entities: Anadarko, Anglo American, Hess, Celesc Distribuicao, Centrais Eletricas de Santa Catarina, and United Arab Bank.
• Upgraded Entities: Ford Motor, Renault, JFK International Air Terminal, and 44 US subprime RMBS.

Research Highlights

• Moody's published reports on various sectors and entities, including US chemicals, global pharmaceuticals, Russian banks, and more, providing in-depth credit analysis.

Recently in Credit Outlook

• References to articles and reports from the previous week, including updates on the joint venture and other credit-related developments.

Summary

The document outlines a range of credit implications for various entities, with a focus on corporate and bank activities. It highlights both credit positive and negative events, such as debt exchanges, acquisitions, and tax assessments, and provides detailed financial analysis to support these assessments. The insights are crucial for investors and creditors to understand the evolving credit landscape.