Fitch: Return to Basics for North American Captive Finance Companies.NEW YORK New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of -- The operating landscape for North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. captive finance companies (CFCs) will be difficult with a challenging credit environment and lower growth prospects, according to Fitch Ratings Fitch Ratings An international rating agency for financial institutions, insurance companies, and corporate, sovereign, and municipal debt. Fitch Ratings has headquarters in New York and London and is wholly owned by FIMALAC of Paris. . Fitch foresees changes to the scope of CFCs with a return to basics and a greater focus on supporting their OEMs. The ongoing credit crisis has uncovered some of the risks associated with a predominantly wholesale funded financial arm. Since the credit markets tightened in mid-2007, availability of financing and the need to contribute capital into CFCs has reduced the long-term profitability of these businesses. Fitch believes that the weak economy will make it difficult for CFCs to pass on increased borrowing costs to customers and dealers, adding additional pressure to operating performance. 'Access to economic cost of capital is critical in order for a CFC CFC See: Controlled foreign corporation to continue to support its OEM (Original Equipment Manufacturer) The rebranding of equipment and selling it. The term initially referred to the company that made the products (the "original" manufacturer), but eventually became widely used to refer to the organization that buys the products and ,' said Christopher Wolfe, Managing Director at Fitch. On the regulatory side, proposed legislative reforms could affect those CFCs that are currently operating under minimal regulatory oversight, causing them to alter their current business strategies. An expected increase in product regulation, mainly for consumer type loans, will level the playing field amongst all financial services providers. Fitch has Negative Outlooks on nine of the 11 companies that it rates. Fitch has published a special report titled 'Capturing the Captives: A Comparative Review of North American Captive Finance Companies', which is available on Fitch's web site at 'www.fitchratings.com'. The report provides analysis of the CFC-OEM relationship and the comparative statistics of major CFCs of North American industrial corporations. Fitch's rating definitions and the terms of use Terms of Use are rules set up by the owner of an intellectual property or service to govern how they may be legally used. In many cases, terms of service are used as a contractual agreement between a company and users of a service they provide. of such ratings are available on the agency's public site, 'www.fitchratings.com'. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures Policies and Procedures are a set of documents that describe an organization's policies for operation and the procedures necessary to fulfill the policies. They are often initiated because of some external requirement, such as environmental compliance or other governmental are also available from the 'Code of Conduct' section of this site. |
|
||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion