China credit warning is well-timed plea for action 6 Dec 2023 Moody’s has put the country’s ratings on downgrade watch. It may seem tardy, given how long property woes and local government debt have vexed investors. But with Beijing heading into a busy planning season, reminders of the need for responsible economic policy are welcome.
One-two punch barely fazes Uncle Sam 2 Aug 2023 Donald Trump became the first US president to face two federal indictments while Fitch yanked the country’s AAA status. Washington is more volatile than it has been in decades. Yet a resilient economy and the world’s reserve currency make it hard to bet against the United States.
Western curbs give Moscow rational default card 3 Mar 2022 Sanctions mean President Vladimir Putin has reason not to repay at least some of his $200 bln of debt, and less fear of the consequences. That would leave creditors stuck for years, with little hope of a recovery. Even depressed prices of Russian bonds may prove optimistic.
S&P’s IHS swoop opens door to messy bidding war 30 Nov 2020 The U.S. index giant has offered to buy its domestic rival for $44 billion including debt. The deal brings synergies and scale in the hot area of financial data, but the returns look skinny. And the premium is not big enough to see off a counter bid from the likes of ICE.
Corona Capital: NYC 30 Sep 2020 Concise views on the pandemic’s corporate and financial fallout: New York City’s economic reboot comes up against a new outbreak.
Corona Capital: Nvidia, Air conditioners 20 Aug 2020 Concise views on the pandemic’s corporate and financial fallout: Nvidia goes gangbusters, HVAC units have their moment in the sun.
S&P checks in for long stay at Hotel Covid Gloom 19 Aug 2020 The rating agency cut the debt rating of Accor to junk. S&P puts more weight on its forecast of a slow post-pandemic recovery than on the French hotel group’s relatively strong balance sheet and encouraging recent trends. Such a cautious approach comes with its own risks.
Corona Capital: Vroom, Estonia WFH, Johnny Rockets 13 Aug 2020 Concise views on the pandemic’s corporate and financial fallout: How Vroom can power through the pandemic; Estonia tries to lure those with wanderlust; Casual dining puts on the Covid-19.
Crisis gives ECB cover to cast off rating shackles 22 Apr 2020 Central banks have historically steered clear of junk bonds. But the Federal Reserve’s move to buy debt rated below investment grade gives its European counterpart an excuse to follow. Moving swiftly would help it avoid a damaging crisis if the Italian government is downgraded.
ESG rating sellers unite from a position of fear 5 Dec 2019 S&P Global and Moody’s have recently bought suppliers of environmental, social and governance data. That highlights ESG’s increasing importance. But the dealmaking also reflects rating providers’ need to tool up and improve often flawed metrics before someone eats their lunch.
Deutsche credit upgraded from hopeless to hapless 15 May 2019 The bank’s credit default swap spread, a measure of riskiness, has nearly halved. The fall was due to a legal technicality, not a change in fortune, but should help clients trade with it. Still, high funding costs mean CEO Christian Sewing will struggle to boost profitability.
Bank woes put Italy’s radicals on the spot 11 Oct 2018 Worsening investor sentiment caused by the new government’s fiscal binge is hurting the country’s banks. The weakest ones, like Carige, need capital, but may struggle to raise it. Either rescuing a bank or shutting it down would be politically toxic.
Guest view: ESG ratings aren’t reliable enough 10 Aug 2018 Socially responsible investing has become a $20 trln-plus industry, but how do we know if firms are actually doing well by doing good? Shiva Rajgopal and Richard Foster pinpoint four big problems in measuring the environmental, social and governance impact of investments.
Portugal beats Italy in bond market pecking order 15 Dec 2017 The country that needed a bailout in 2011 can borrow for less than its larger peer. Investors’ preference for Portuguese debt reflects its more vibrant economy, and messy Italian politics. Lisbon can keep outshining Rome, so long as lax bond markets don’t encourage bad habits.
China can afford to shrug off credit downgrades 21 Sep 2017 S&P just dinged the sovereign rating. Banks have been marked down too. Worries about rising debt are justified, but the market’s non-reaction shows how differently China’s economy is wired. State control and plentiful savings mean Beijing will escape most of the usual fallout.
Sovereign downgrade will keep Beijing on its toes 24 May 2017 Moody’s has downgraded China for the first time since 1989, now ranking it below Taiwan. It is mostly symbolic as foreign debt ownership is minimal and local corporate ratings follow their own logic. But the public reprimand will check Beijing's ambition to attract funds onshore.
S&P’s sleight of hand is South Africa’s gain 2 Dec 2016 The credit ratings firm has downgraded the sub-Saharan state's local currency bonds but spared its foreign debt. This allows South Africa to escape junk status for the time being. Almost as important, there's no excuse now for firing respected finance minister Pravin Gordhan.
Rating cut says more about S&P than Warren Buffett 16 May 2013 Standard & Poor’s has taken Berkshire Hathaway down a notch to AA. But the downgrade is due to changes in the rater’s methodology rather than Buffett’s firm doing something to make a default more likely. Some tweaks are fine. But S&P could end up making ratings more of a muddle.
DoJ deals $4 bln-plus downgrade to S&P, Moody’s 5 Feb 2013 The rating firms’ successful legal defenses to date and a booming debt market may have persuaded shareholders that good times were back. But a U.S. government suit against S&P, though a long shot, is a sharp reminder that subprime sins haven’t been forgiven or forgotten.
Punished credit rater kinda misses the point 22 Jan 2013 The SEC has barred Sean Egan and his scrapper of a firm from some sanctioned ratings after they wrongly asserted experience with asset-backed deals. Of course, familiarity hasn’t necessarily helped Moody’s, S&P or Fitch produce smarter ratings. Neither does a government blessing.