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Tag >> credit-rating agencies
Mar 21
2011

Moody’s encourages Limited to borrow

Posted by Stephen Taub in Moody's Investors Servicedefault ratedefaultdebt-rating agenciesDealscredit-rating agenciesCredit RatingsCash

Stephen Taub

Limited Brands said it will sell $750 million in 10-year notes. The company said it intends to use the proceeds to repurchase $500 million of stock under a new share repurchase program and for general corporate purposes.

The move seemed to surprise some commentators. But investors applauded the move, bidding up the stock by more than 1 percent when it began trading Tuesday morning.

Jul 26
2010

Ford Motor Credit pulls ABS deal

Posted by dbedell in ToyotaSecurities and Exchange CommissionFord Motor CreditDealscredit-rating agenciesasset backedABS

dbedell

The impact of regulatory reforms signed into law last week is already being seen in asset-backed securities, as Ford Motor Credit pulled an ABS deal last week after the major rating agencies confirmed that they will not allow their ratings to be used in bond prospectuses for such securities—thanks to changing liability under the regulatory overhaul.

The regulations set new liabilities for ratings agencies that consent to allow their ratings to be used in public ABS offering prospectuses. Under the new law, ratings firms are subject to “expert liability”—which means that they will have the same liability and legal risks as accountants and others specialists that are involved in bond sales, as Marine Cole reported in her blog last week.

Jul 21
2010

How to reopen the ABS market

Posted by mcole in securitizationRiskRegulationreformcredit-rating agenciesCredit RatingsCreditBanksasset backed

mcole

The main three credit ratings agencies have told Wall Street in recent weeks that underwriters won't be able to use their credit ratings in documents selling asset-backed securities for fear of being sued.

While it has already placed the ABS market on hold and has securitization professionals up in arms, there are several ways for banks to continue to sell ABS going forward.

Jul 06
2010

Rating agencies increasingly irrelevant

Posted by dbedell in unrated bondS&P 500Dealscredit-rating agenciesCredit Ratingsbrand

dbedell

As companies branch out beyond traditional funding sources, many are considering tapping the unrated bond market. Investors are snapping up deals – enjoying the higher returns from unrated bonds—and companies are starting to recognize that demand. While they may have to pay a premium to make up for the lack of a rating, and the disclosures that go with it, the development could augur less reliance on rating agencies, whose value has been called into question.

A number of deals have gone forward in both the US and in Europe—although more in Europe, which traditionally has a larger unrated market. For example, UK rail company National Express launched a $570 million, 7-year deal in January, which came in with a coupon of 6.25 percent.

Jun 30
2010

Signs of a junk bond revival

Posted by mcole in junk bondsjunkhigh yield bondsDealscredit-rating agenciesCreditCash

mcole

High-yield bonds are slowly recovering from the fallout related to the European sovereign debt crisis.

Junk bond mutual funds saw inflows of $1.39 billion in the week ended June 28, according to data provided by Thomson Reuters. It's the second week in a row of inflows. Prior to that there were only outflows since the end of April.

Jun 15
2010

Greece shows once again the need for rating agency reform

Posted by mcole in RiskGreecefinancial reformcredit-rating agenciesCredit RatingsCreditcompliance

mcole

The downgrade of Greece to junk status by Moody's Investors Service this week highlighted once again how actions of credit ratings agencies are becoming almost useless to investors. Nevertheless, ratings firms may escape any major changes to their business as financial reform is currently being discussed.

Greece has been trading as a junk credit for a couple of months, despite the 110 billion euros rescue package provided a month ago. As a result, Moody's downgrade is only confirming what market participants have long anticipated.

May 12
2010

Bond issuance on hold due to woes in Europe

Posted by mcole in RiskrecoverydefaultsdebtDealscredit-rating agenciesCreditbonds

mcole

Issuance of investment-grade corporate bonds continue to be on hold despite the European Union having agreed to a rescue package for Greece in the hope to contain contagion of its fiscal problems to other countries.

The three-month London interbank offered rate is also at its highest level since August as my colleague Denise noted in a post earlier this week. Spreads of corporate bonds, especially those of financial services companies's bonds, have also widened since the crisis in Greece started.

Mar 16
2010

What Dodd or others can’t mandate

Posted by Stephen Taub in sox 404Say on PaySarbanes-Oxleyratingsexecutive compensationdirectorscredit-rating agenciesCredit RatingsConsumer Financial Protection AgencyChristopher DoddChris DoddbankruptcyBanking

Stephen Taub

You have to hand it to Senator Chris Dodd. For someone who has heavily depended on the generosity of the largest banks and investment firms for his fund-raising, he has proposed a pretty impressive bill for further regulating the financial firms....given the current environment in Washington, of course.

I am not confident it will prevent another AIG, Lehman or Bear Stearns. The current poisoned partisanship in Washington on both sides of the aisle wouldn't support that kind of onerous bill.

Feb 15
2010

Greek swaps just the latest securitization to go bad

Posted by Ron F in RegulationGoldman SachsGAAPfinancial crisisEnronderivativescredit-rating agenciesCredit RatingscomplianceBanksbanking reformBankingAccounting

Ron F

The securitization of Greek debt arranged by Goldman Sachs is hardly a new development in modern finance.

In fact, it looks a lot like some of the deals that Enron arranged with the help of investment banks, only the Greek currency swaps seem to have played the rules.

Jan 06
2010

Credit quality keeps improving

Posted by Stephen Taub in Standard & Poor'seconomydebt-rating agenciescredit-rating agenciescredit crisisCreditCapitalbonds

Stephen Taub

So, is the economy turning around? The skeptics-and there are always skeptics-say no, insisting the recent growth and positive economic signals are the result of inventory restocking and the stimulus bill. Once these factors are exhausted, we'll suffer a second dip in the decline, they argue.

Never mind that a majority of the stimulus funds haven't yet been spent on stimulating the economy, but this is a topic for another discussion.

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