Fitch To Initiate 'BBB+' IDR For MF Global Upon Spin-off.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 -- 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. expects to assign a 'BBB+' long-term Issuer Default Rating (IDR IDR In currencies, this is the abbreviation for the Indonesian Rupiah. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. ) rating to MF Global (formerly Man Financial) upon its spin-off from Man Group. Man Financial will be renamed MF Global upon completion of the spin-off, with debt expected to be issued by a subsidiary and guaranteed by MF Global. MF Global's Rating Outlook will be Stable. The rating is based on MF Global's market position as a leading independent futures and options broker operating typically as an exclusive broker. Ratings are supported by prudent liquidity, risk management and a history of low credit losses. Ample liquidity and capital for the independent firm also support its core business of execution and clearing. MF Global's management is experienced and has demonstrated good controls and integration skills. MF Global owns several strategically located regulated brokers with high volumes of exchange traded activity. MF Global is a conglomeration con·glom·er·a·tion n. 1. a. The act or process of conglomerating. b. The state of being conglomerated. 2. An accumulation of miscellaneous things. of several former regional firms that possesses key products creating strong market share in broking Bro´king a. 1. Of or pertaining to a broker or brokers, or to brokerage. Redeem from broking pawn the blemished crown. - Shak. and clearing futures related contracts. Revenues are volume driven from execution and clearing fees, matched principal spreads and interest income from client credit balance rather than proprietary trading Proprietary Trading When a firm trades for direct gain instead of commission dollars. Essentially, the firm has decided to profit from the market rather than commissions from processing trades. . Acquisitions have facilitated increasing market share and more active participation in electronic trading  This article or section is in need of attention from an expert on the subject.Please help recruit one or [ improve this article] yourself. See the talk page for details. . The liquidity and capital structure will be sufficient to manage the business and provide support for incremental growth. Post spin-off, the capital structure will consist of $1.2 equity and $1.180 billion in longer dated bonds. MF Global will also issue $220 million in hybrid debt to supplement regulatory capital. Liquidity is expected to be well managed with a highly liquid balance sheet. MF Global already has established a committed $1.5 billion revolver from a syndicate of highly rated financial institutions. This will be supplemented by additional uncommitted facilities. Prior to spin-off, the term debt and hybrid will be funded by a $1.4 billion temporary 364-day bridge facility that will be repaid once proceeds from the offerings become available. MF Global's primary risks are operational. These risks, along with credit and market risk, are limited due to conservative policies regarding margin practices and its exclusive focus on brokerage. Profits are expected to be augmented by development of products that may marginally increase credit risk. Competition in futures exchanges This is a list of futures exchanges. Those stock exchanges that also offer trading in futures contracts besides trading in securities are listed both here and the list of stock exchanges. and electronic based trading is expanding rapidly. Fitch believes MF Global will face challenges in product innovation in addition to greater competition as exchanges go public, consolidate and other better capitalized financial institutions invest in alternative trading venues. Loss of market share, declining profitability or a major operational problem could negatively impact Man Global's ratings. Fitch expects to assign the following ratings: MF Global --Issuer Default Rating (IDR) 'BBB+'; --Senior debt 'BBB+'; --Subordinated 'BBB'; --Preferred 'BBB'; --Short-term Issuer 'F2'; --Rating Outlook Stable. 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. |
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