S&P: Number of Global Fallen Angels Could Remain High.Business Editors NEW YORK--(BUSINESS WIRE)--Standard & Poor's Nov. 22, 2002-- Fallen angels (issuers whose credit ratings fall to 'BB+' and below from 'BBB-' and above, hence making the move to the speculative-grade rating category from the investment-grade investment-grade Of, relating to, or being a bond suitable for purchase by institutions under the prudent man rule. Investment-grade is restricted to those bonds graded BBB and above by Standard & Poor's and graded Baa3 and above by Moody's. rating category) are flourishing flour·ish v. flour·ished, flour·ish·ing, flour·ish·es v.intr. 1. To grow well or luxuriantly; thrive: The crops flourished in the rich soil. 2. in an environment characterized char·ac·ter·ize tr.v. character·ized, character·iz·ing, character·iz·es 1. To describe the qualities or peculiarities of: characterized the warden as ruthless. 2. by weak corporate earnings and an uncertain economic recovery, Standard & Poor's Ratings Services Ratings Service A company, such as Moody's or Standard & Poor's, that rates various debt and preferred stock issues for safety of payment of principal, interest, or dividends. said today. Globally, on a cumulative basis this year, the 69 fallen angels (US$172.1 billion bonds outstanding) surpassed last year's 56 (US$111.2 billion) by count and dollar volume, continuing the six-year trend of increasing counts. The U.S. has contributed 42 fallen angels this year (61%), affecting US$122.3 billion compared to full year 2001 with 35 fallen angels (US$96.7 billion). In the near term, the potential number of U.S. fallen angels could remain high, with CreditWatch implications and outlooks on investment-grade U.S. corporate ratings 4% positive, 28% negative, 67% stable, and half a percent developing. Although slightly better than the U.S. alone, the non-U non-U adj. Chiefly British Not characteristic of the upper class, especially in language usage. [non- + U2. .S. distribution also indicates the potential for additional downward pressure with CreditWatch implications and outlooks 5% positive, 24% negative, and 71% stable. Standard & Poor's has identified 76 issuers around the globe that have fallen angel potential, four more than identified in August. "The automotive, media & entertainment, and metal, mining & steel subsectors have the cloudiest forecasts, each with over 40% of issuers within each subsector distribution having either a negative outlook or remaining on CreditWatch with negative implications," said Diane DIANE Diversified Information and Assistance Network (Tennessee Valley Authority) DIANE Direct Information Access Network for Europe DIANE Digital Integrated Attack and Navigation Equipment Vazza, head of Standard & Poor's Global Fixed Income Research. Year-to-date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. , 69 issuers globally with bonds outstanding totaling US$172.1 billion have fallen to speculative Speculative Securities that involve a high level of risk. speculative Of or relating to an asset or a group of assets with uncertain returns. The greater the degree of uncertainty the more speculative the asset. grade from investment grade. In contrast, 29 issuers, with bonds totaling US$39.8 billion, have risen to investment grade from speculative grade. In the past 16 years, there have been 456 (US$558 billion) fallen angels and 432 (US$349 billion) rising stars. Of the 69 fallen angels this year, 42 were in the U.S.; six in Canada Canada (kăn`ədə), independent nation (2001 pop. 30,007,094), 3,851,787 sq mi (9,976,128 sq km), N North America. Canada occupies all of North America N of the United States (and E of Alaska) except for Greenland and the French islands of ; three in Ireland Ireland, Irish Eire (âr`ə) [to it are related the poetic Erin and perhaps the Latin Hibernia], island, 32,598 sq mi (84,429 sq km), second largest of the British Isles. ; two each in Australia Australia (ôstrāl`yə), smallest continent, between the Indian and Pacific oceans. With the island state of Tasmania to the south, the continent makes up the Commonwealth of Australia, a federal parliamentary state (2005 est. pop. , France and the U.K.; and one each in Bermuda Bermuda (bûrmy  `də), British dependency (2005 est. pop. 65,400), 21 sq mi (53 sq km), comprising some 150 coral rocks, islets, and islands (of which some 20 are inhabited), in the , Egypt Egypt (ē`jĭpt), Arab. Misr, biblical Mizraim, officially Arab Republic of Egypt, republic (2005 est. pop. 77,506,000), 386,659 sq mi (1,001,449 sq km), NE Africa and SW Asia. , Germany Germany (jûr`mənē), Ger. Deutschland, officially Federal Republic of Germany, republic (2005 est. pop. 82,431,000), 137,699 sq mi (356,733 sq km). , Hong Kong Hong Kong (hŏng kŏng), Mandarin Xianggang, special administrative region of China, formerly a British crown colony (2005 est. pop. 6,899,000), land area 422 sq mi (1,092 sq km), adjacent to Guangdong prov. , Italy Italy (ĭt`əlē), Ital. Italia, officially Italian Republic, republic (2005 est. pop. 58,103,000), 116,303 sq mi (301,225 sq km), S Europe. , Japan,
Netherlands Netherlands (nĕth`ərləndz), Du. Nederland or Koninkrijk der Nederlanden, officially Kingdom of the Netherlands, constitutional monarchy (2005 est. pop. 16,407,000), 15,963 sq mi (41,344 sq km), NW Europe. , New Zealand New Zealand (zē`lənd), island country (2005 est. pop. 4,035,000), 104,454 sq mi (270,534 sq km), in the S Pacific Ocean, over 1,000 mi (1,600 km) SE of Australia. The capital is Wellington; the largest city and leading port is Auckland. , Philippines Philippinesofficially Republic of the Philippines Island country, western Pacific Ocean, on an archipelago off the southeast coast of Asia. Area: 122,121 sq mi (316,294 sq km). Population (2005 est.): 84,191,000. , Spain Spain, Span. España (āspä`nyä), officially Kingdom of Spain, constitutional monarchy (2005 est. pop. 40,341,000), 194,884 sq mi (504,750 sq km), including the Balearic and Canary islands, SW Europe. , Sweden Sweden, Swed. Sverige, officially Kingdom of Sweden, constitutional monarchy (2005 est. pop. 9,002,000), 173,648 sq mi (449,750 sq km), N Europe, occupying the eastern part of the Scandinavian peninsula. , and Uruguay Uruguay, country, South America Uruguay (y  `rəgwā, gwī, Span. r . By
sector, there were 43 industrial (US$88.5 billion), 13 utility (US$33.3
billion), seven financial (US$1.5 billion), four telecommunications Communicating information, including data, text, pictures, voice and video over long distance. See communications. (US$48.7 billion), and two sovereign SOVEREIGN. A chief ruler with supreme power; one possessing sovereignty. (q.v.) It is also applied to a king or other magistrate with limited powers.2. In the United States the sovereignty resides in the body of the people. Vide Rutherf. Inst. 282. fallen angels. The largest were WorldCom The former name of MCI. Based in Jackson, MS, WorldCom, Inc. was a major, international telecommunications carrier. It was founded in 1983 by Bernard Ebbers as Long Distance Discount Service (LDDS), a reseller of AT&T WATS lines to small businesses. Inc. (US$30.0 billion), Vivendi
VIVENDI® is a software package for care management and staff organisation published by the German software company CONNEXT and introduced in 1995. Universal S.A. (US$16.6 billion), Williams Companies The Williams Companies, Inc. (NYSE: WMB) is an energy company based in Tulsa, Oklahoma. Its core business is natural gas exploration, production, processing, and transportation, with additional petroleum and electricity generation assets. Inc. (US$13.0), and Qwest Communications
Currently, Standard & Poor's has 76 issuers globally that are rated 'BBB-' and are on CreditWatch with negative implications or are rated 'BBB-' and have a negative outlook. This rating designation DESIGNATION, wills. The expression used by a testator, instead of the name of the person or the thing he is desirous to name; for example, a legacy to. the eldest son of such a person, would be a designation of the legatee. Vide 1 Rop. Leg. ch. 2. 2. and CreditWatch/rating outlook is the lowest in the investment-grade category. Standard & Poor's CreditWatch indicates the potential direction of a credit rating change, dependent on identifiable events and short-term trends Short-term trend Erratic price movements that last less than three weeks. , and is typically resolved within 90 days. A rating outlook indicates the potential direction of a credit rating change within six months to two years. Of the global issuers rated 'BBB-/Watch Neg', there are 13 industrial, one utility, and one financial institution. Eleven are U.S. issuers, and one each from Bermuda, France, New Zealand, and Switzerland Switzerland (swĭt`sərlənd), Fr. Suisse, Ger. Schweiz, Ital. Svizzera, officially Swiss Confederation, federal republic (2005 est. pop. 7,489,000), 15,941 sq mi (41,287 sq km), central Europe. . Of the 61 global issuers rated 'BBB-/Negative', there are 48 industrial, 10 financial, two utilities, and one telecommunications. Within the industrials sector, 10 are media & entertainment; six high technology; five chemicals, packaging & environmental services The various combinations of scientific, technical, and advisory activities (including modification processes, i.e., the influence of manmade and natural factors) required to acquire, produce, and supply information on the past, present, and future states of space, atmospheric, ; five retail/restaurants; four capital goods Capital Goods Any goods used by an organization to produce other goods. Notes: Examples of capital goods include office buildings, equipment, and machinery. See also: Capital Expenditure, Disinvestment Capital goods ; four consumer products; three each in forest product & building materials Building materials used in the construction industry to create . These categories of materials and products are used by and construction project managers to specify the materials and methods used for . , health care, and transportation; two homebuilder/real estate; and one each aerospace & defense, automotive, and metals, mining & steel. Forty-three are U.S. issuers, six are from Canada, two each from Italy, Japan, and the U.K., and one each from Bermuda, Hong Kong, Ireland, Mexico Mexico, city, Mexico Mexico or Mexico City, Span. Ciudad de México (Méjico), city (1990 pop. 8,236,960; 1991 met. area est. 20,899,000), central Mexico, capital and largest city of Mexico. , Singapore Singapore (sĭng`gəpôr, sĭng`ə–, sĭng'gəpôr`), officially Republic of Singapore, republic (2005 est. pop. 4,426,000), 240 sq mi (625 sq km). , and Spain. "Since Standard & Poor's last commentary on fallen angels (Aug. 13, 2002), 19 investment-grade issuers have been downgraded to speculative-grade. No potential fallen angel issuers had rating upgrades," Ms. Vazza concluded. One year ago there were 59 companies on the Potential Rising Stars lists. As of Nov. 21, 2002, 17 of these 59 companies have become fallen angels, 24 remain on the current list, 16 remain rated 'BBB-', but are no longer on CreditWatch negative or have a negative outlook, one has been upgraded, and one is no longer rated.
TABLE 1:
'BBB-' RATED ISSUERS ON CREDITWATCH WITH NEGATIVE IMPLICATIONS
Sector Subsector Issuer Country
Fin. Inst. Insurance Tower Ltd.(a) New Zealand
Industrial Cap.Goods ABB Ltd.(a) Switzerland
Industrial Cap.Goods JLG Industries Inc.(a) U.S.
Industrial Cap.Goods The Shaw Group Inc.(a) U.S.
Industrial Cons.Prod. Dole Food Co. Inc.(a) U.S.
Industrial Cons.Prod. Kellwood Co.(a) U.S.
Industrial Diversified Trinity Industries Inc. U.S.
Industrial Finance Co. Bellon S.A.(a) France
Industrial Forest&Build Tyco International Ltd. Bermuda
Industrial Health Care Omnicare Inc.(a) U.S.
Industrial Health Care Tenet Healthcare Corp. U.S.
Industrial High Tech PerkinElmer Inc.(4) U.S.
Industrial Metals&Mining Massey Energy Co.(a) U.S.
Industrial Retailing Delhaize America Inc.(a) U.S.
Utility Utility Edison Mission Energy/
Edison Mission Midwest
Holdings Co. (Edison
International)(a) U.S.
Source: Standard & Poor's Global Fixed Income Research.
TABLE 2:
'BBB-' RATED ISSUERS WITH NEGATIVE OUTLOOKS
Sector Subsector Issuer Country
Banking Bank Capital One Bank,
Falls Church, VA
(Capital One Financial
Corp.)(a) U.S.
Banking Bank Provident Financial
Group Inc. U.S.
Fin. Inst. Fin. Inst. Desc S.A. de C.V. Mexico
Fin. Inst. Insurance Co-operators General
Insurance Co.(a) Canada
Fin. Inst. Insurance Great American Financial
Resources Inc.
(American Financial
Group Inc.)(a) U.S.
Fin. Inst. Insurance La Fondiaria Assicurazioni
SpA(a) Italy
Fin. Inst. Insurance Markel Corp. U.S.
Fin. Inst. Insurance PMA Capital Corp.(a) U.S.
Fin. Inst. Insurance SAI - Societa Assicuratrice
Industriale SpA(a) Italy
Fin. Inst. Insurance White Mountains Insurance
Group Ltd. Bermuda
Industrial Aero&Def AAR Corp. U.S.
Industrial Automotive ArvinMeritor Inc. U.S.
Industrial Cap. Goods MasTec Inc.(a) U.S.
Industrial Cap. Goods Thomas & Betts Corp. U.S.
Industrial Cap. Goods Toshiba Corp. Japan
Industrial Cap. Goods Victor Co. of Japan Ltd.
(JVC Corp.) Japan
Industrial CP&ES Crompton Corp. U.S.
Industrial CP&ES Ferro Corp. U.S.
Industrial CP&ES FMC Corp.(a) U.S.
Industrial CP&ES Millennium Chemicals Inc. U.S.
Industrial CP&ES NOVA Chemicals Corp. Canada
Industrial Cons.Prod Corn Products International Inc. U.S.
Industrial Cons.Prod Glanbia PLC Ireland
Industrial Cons.Prod Smithfield Foods Inc. U.S.
Industrial Cons.Prod Tommy Hilfiger, U.S.A. Inc. U.S.
Industrial Forest&Build Abitibi - Consolidated Inc. Canada
Industrial Forest&Build Bowater Inc.(a) U.S.
Industrial Forest&Build Potlatch Corp. U.S.
Industrial Health Care Bausch & Lomb Inc. U.S.
Industrial Health Care Group Health Cooperative
of Puget Sound U.S.
Industrial Health Care Quintiles Transnational Corp. U.S.
Industrial High Tech Agilent Technologies Inc. U.S.
Industrial High Tech Amdocs Ltd. U.S.
Industrial High Tech Anixter International Inc. U.S.
Industrial High Tech Arrow Electronics Inc.(a) U.S.
Industrial High Tech AVNET Inc.(a) U.S.
Industrial High Tech Chartered Semiconductor
Manufacturing Singapore
Industrial Home/Real Kerry Properties Ltd. Hong Kong
Industrial Home/Real Jones Lang LaSalle Inc.(a) U.S.
Industrial Media&Ent American Greetings Corp. U.S.
Industrial Media&Ent Belo Corp. U.S.
Industrial Media&Ent Clear Channel
Communications Inc. U.S.
Industrial Media&Ent Four Seasons Hotels Inc. Canada
Industrial Media&Ent Hilton Hotels Corp. U.S.
Industrial Media&Ent Manpower Inc.(a) U.S.
Industrial Media&Ent MGM Mirage U.S.
Industrial Media&Ent Park Place Entertainment Corp. U.S.
Industrial Media&Ent Sol Melia S.A.(a) Spain
Industrial Media&Ent Starwood Hotels & Resorts
Worldwide Inc. U.S.
Industrial Metals/Mining Phelps Dodge Corp. U.S.
Industrial Retailing Best Buy Co. Inc. U.S.
Industrial Retailing Big Lots Inc. U.S.
Industrial Retailing J.C. Penney Co. Inc. U.S.
Industrial Retailing Winn-Dixie Stores Inc.(a) U.S.
Industrial Retailing Zale Corp. U.S.
Industrial Transport Airborne Inc. U.S.
Industrial Transport British Airways PLC U.K.
Industrials Transport Stagecoach Group PLC(a) U.K.
Telecom Telecom Cogeco Cable Inc. Canada
Utility Utility AltaGas Services Inc.(4) Canada
Utility Utility Southwest Gas Corp. U.S.
Aero&Def-Aerospace & Defense, Cap.Goods-Capital Goods,
Cons.prod-Consumer products, CP&ES-Chemicals, packaging &
environmental services, FI-Financial Institutions, Forest&Build-Forest
products & building materials, High Tech-High technology,
Home/Real-Homebuilders/real estate, Media&Ent-Media & entertainment,
Metals/Mining-Metals, mining & steel, Oil & Gas-Oil & gas exploration
& production, Retail/Rest-Retail/restaurants,
Transport-Transportation.
Note: Note (a) indicates an issuer new to the lists since the Aug.
13, 2002 commentary. A double-asterisk indicates an issuer that was
formerly rated 'BBB-' and on CreditWatch Negative.
Data as of Nov. 20, 2002.
Source: Standard & Poor's Global Fixed Income Research
TABLE 3:
FALLEN ANGELS IN 2002
Rating Sector/
Date Parent Company From To subsector Country
1/11/02 Brush Engineered
Materials Inc. BBB BB- Metals/Mining U.S.
1/16/02 Covanta Energy Corp. BBB B CP&ES U.S.
1/18/02 Goodyear Tire &
Rubber Co. (The) BBB BB+ Automotive U.S.
1/23/02 YPF Sociedad Anonima
(Repsol-YPF S.A.) BBB BB+ Oil & Gas Spain
1/29/02 Getronics N.V. BBB- BB+ High Tech Netherl-
ands
1/31/02 Equistar Chemicals L.P.
(Lyondell Chemical Co.) BBB- BB+ CP&ES U.S.
2/12/02 Avaya Inc. (local
currency only) BBB- BB+ High Tech U.S.
2/14/02 Gap Inc. (The) BBB+ BB+ Retailing U.S.
2/14/02 Mutual Risk Management
Ltd. BBB- BB Insurance Bermuda
2/14/02 Uruguay (Oriental
Republic of) BBB- BB+ Sovereign Uruguay
2/18/02 Westralia Airports
Corp.Pty.Ltd. BBB- BB+ Transport Australia
2/22/02 AT&T Canada Inc. BBB BB Telecom Canada
2/25/02 New World Infrastructure
Ltd. BBB- BB+ Home/Real Hong Kong
3/1/02 Asahi Bank Ltd. BBB- BB+ Bank Japan
3/11/02 Avaya Inc. BBB- BB+ High Tech U.S.
3/13/02 Navistar International
Corp. BBB- BB+ Automotive U.S.
3/29/02 Sierra Pacific
Resources BBB BB Utility U.S.
4/9/02 Nortel Networks Ltd. BBB- BB- High Tech Canada
4/10/02 Spherion Corp. BBB- BB Media&Ent U.S.
4/12/02 Dollar General Corp. BBB- BB+ Retailing U.S.
4/12/02 Teleglobe Inc. BBB+ B- Telecom Canada
4/18/02 Hudson's Bay Co. BBB- BB+ Retailing Canada
4/24/02 Quezon Power
(Philippines) Ltd. Co.
(local currency only) BBB- BB+ Utility Philipp-
ines
4/25/02 National Rail Corp. Ltd. BBB- BB- Transport Australia
5/10/02 Solutia Inc. BBB- BB+ CP&ES U.S.
5/10/02 WorldCom Inc. BBB BB Telecom U.S.
5/13/02 SC International
Services Inc. BBB- BB Cons.Prod U.S.
5/21/02 Zenith National
Insurance Corp. BBB- BB+ Insurance U.S.
5/22/02 Egypt (Arab Republic of) BBB- BB+ Sovereign Egypt
5/22/02 Qwest Communications
International Inc. BBB- BB+ Telecom U.S.
6/3/02 Briggs & Stratton Corp. BBB- BB+ Cons.Prod U.S.
6/3/02 Reno De Medici SpA BBB- BB+ CP&ES Italy
6/19/02 Legacy Hotels Real
Estate Investment
Trust BBB- BB+ Media&Ent Canada
6/20/02 Taubman Realty
Group L.P. BBB- BB+ Home/Real U.S.
7/2/02 Elan Corp. PLC BBB- BB- Health Care Ireland
7/4/02 AES Gener S.A.
(AES Corp. (The)) BBB- BB Utility U.S.
7/12/02 Alcatel BBB BB+ High Tech France
7/12/02 American Equity
Investment Life
Holding Co. BBB- BB+ Insurance U.S.
7/12/02 Price Development
Co. L.P. (General
Growth Properties
Inc.) BBB- BB+ Home/Real U.S.
7/16/02 Panhandle Eastern
Pipeline/ Consumers
Energy Co./Consumers
Power Co (CMS Energy
Corp.) BBB- BB Utility U.S.
7/22/02 Dynegy Inc. BBB- BB Utility U.S.
7/23/02 Williams Companies Inc.
(The) BBB BB+ Oil & Gas U.S.
7/26/02 NRG South Central
Generating/NRG
Northeast Generating /
NRG Energy Inc. (Xcel
Energy Inc.) BBB BB Utility U.S.
7/29/02 Corning Inc. BBB- BB+ Cap.Goods U.S.
7/31/02 Petroleum Geo-Services
ASA BBB- BB- Oil & Gas U.S.
7/31/02 USGen New England Inc./
PG&E National Energy
Group Inc.(PG&E Corp.) BBB BB+ Utility U.S.
8/1/02 Ericsson
(Telefonaktiebolaget
L.M.) BBB- BB+ High Tech Sweden
8/2/02 Trenwick Group Ltd. BBB- BB Insurance U.S.
8/7/02 Edison Mission Energy
Funding Corp. (Edison
International) BBB- BB Utility U.S.
8/7/02 Green Property PLC BBB- BB Home/Real Ireland
8/14/02 Vivendi Universal S.A. BBB- BB Media&Ent France
9/3/02 Jefferson Smurfit
Group PLC BBB+ BB+ Forest&Build Ireland
9/6/02 British Energy PLC BBB BB Utility U.K.
9/12/02 Reliant Resources Inc. BBB- BB+ Utility U.S.
9/15/02 Tranz Rail Holdings Ltd. BBB BB+ Transport New
Zealand
9/18/02 PolyOne Corp. BBB- BB+ CP&ES U.S.
9/19/02 HEALTHSOUTH Corp. BBB- BB Health Care U.S.
9/23/02 FMC Corp.(b) BBB- BB+ CP&ES U.S.
9/27/02 Allmerica Financial Corp. BBB BB Insurance U.S.
9/27/02 Georgia-Pacific Corp. BBB- BB+ Forest&Build U.S.
10/2/02 Dyckerhoff AG BBB- BB Forest&Build Germany
10/4/02 AMERCO BBB BB+ Transport U.S.
10/9/02 Allegheny Energy Inc. BBB BB Utility U.S.
10/15/02 Cummins Inc. BBB- BB+ Automotive U.S.
10/21/02 Mirant Corp. BBB- BB Utility U.S.
11/4/02 IPSCO Inc. BBB- BB+ Metals/Mining Canada
11/14/02 Corus Group PLC BBB- BB Metals/Mining U.K.
11/19/02 Aquila Inc BBB- BB Utility U.S.
11/19/02 Presidential Life Corp. BBB- B+ Insurance U.S.
Aero&Def-Aerospace & Defense, Cap.Goods-Capital Goods,
Cons.prod-Consumer products, CP&ES-Chemicals, packaging &
environmental services, FI-Financial Institutions, Forest&Build-Forest
products & building materials, High Tech-High technology,
Home/Real-Homebuilders/real estate, Media&Ent-Media & entertainment,
Metals/Mining-Metals, mining & steel, Oil & Gas-Oil & gas exploration
& production, Retail/Rest-Retail/restaurants,
Transport-Transportation.
(b) Selected debt issues.
Data as of Nov. 20, 2002.
Source: Standard & Poor's Global Fixed Income Research.
Copyright 2002, Standard & Poor's Ratings Services |
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