S&P Affrms Helaba's AAA Rtg;Outlook Revised To Stable.LONDON--(BUSINESS WIRE)--Standard & Poor's CreditWire 12/12/97-- Standard & Poor's today affirmed af·firm v. af·firmed, af·firm·ing, af·firms v.tr. 1. To declare positively or firmly; maintain to be true. 2. To support or uphold the validity of; confirm. v.intr. its triple-'A' long-term and 'A-1'-plus short-term counterparty Counterparty The other participant, including intermediaries, in a swap or contract. credit ratings, as well as its triple-'A' senior debt and 'A-1'-plus commercial paper ratings on the Landesbank Hessen-Thueringen Girozentrale (Helaba) and related entities, see table below. At the same time, the implicit triple-'A'/'A-1'-plus ratings of the state of Hesse, as the supporting entity for Helaba, are affirmed. The outlook on all the ratings is revised to stable from negative. Via a chain of liabilities extending from the sole owner of the bank (the Hesse-Thueringia Savings Bank savings bank, financial institution that, until recently, performed only the following functions: receiving savings deposits of individuals, investing them, and providing a modest return to its depositors in the form of interest. and Giro giro Noun pl -ros 1. (in some countries) a system of transferring money within a bank or post office, directly from one account into another 2. Association) through the state's savings banks and municipalities, the state would be expected to provide support for the bank in the unlikely event of severe financial problems. The state's rating is based on Hesse's robust service-based economy, above-average long-term growth prospects (especially in light of Frankfurt's increasingly visible role in the european financial sector), modern infrastructure, and above-average wealth. In addition, Hesse's financial position and performance remains strong as improved fiscal discipline halted the budgetary slippage Slippage The difference between estimated transaction costs and the amount actually paid. Notes: Slippage is usually attributed to a change in the spread. See also: Spread, Transaction Costs Slippage in 1994 and 1995. Slightly improving revenues from recessionary lows combined with restrained expenditure growth resulted in the state's 1996 deficit after capital spending capital spending Spending for long-term assets such as factories, equipment, machinery, and buildings that permits the production of more goods and services in future years. improving to negative 7.2% of total revenues, down from a 1995 peak negative 9.6% deficit. Further improvement has not materialized in 1997 due to renewed tax revenue shortfalls throughout Germany, which will increase Hesse's equalization payments Equalization payments are cash payments made in some federal systems of government from the federal government to state or provincial governments with the objective of offsetting differences in available revenue or in the cost of providing services. to fiscally weaker states and not be fully compensated by Hesse's expenditure cuts. With tax receipt growth expected to significantly strengthen only in 1999, the state has budgeted a return to a small operating surplus Operating surplus is an accounting concept used in national accounts statistics (such as United Nations System of National Accounts (UNSNA) and in corporate and government accounts. It is also used in macro-economics as a proxy for total pre-tax profit income. of 1.2% of operating revenues operating revenue Revenue from any regular source. Revenue from sales is adjusted for discounts and returns when calculating operating revenue. Compare other revenue. and a low 3.6% deficit after capital spending in 1999. Hesse's debt burden remains high compared with similarly rated triple-'A' local and regional governments although net interest accounts for a moderate 8% of operating revenue. Helaba, by far Hesse's largest contingent liability Contingent Liability 1. The possibility of an obligation to pay certain sums dependent on future events. 2. Defined obligations by a company that must be met, but the probability of payment is minimal. Notes: 1. , is the fifth-largest German Landesbank, with total consolidated assets of DM184.8 billion (US$105.6 billion at DM1.75 to US$1) at June 30, 1997. Helaba acts as the state bank of the federal states of Hesse and Thueringia, supporting public authorities in the fulfillment of their public duties, and is the central clearing institution for the states' savings banks, but is also active as a commercial bank. ---CreditWire -0- AFFIRMED RATINGS - OUTLOOK REVISED TO STABLE FROM NEGATIVE: State of Hesse Implied Issuer Credit Rating AAA/A-1+ Landesbank Hessen-Thueringen Girozentrale Counterparty ratings AAA/A-1+ Senior unsecured debt AAA Certificate of Deposit A-1+ Commercial Paper A-1+ Helaba Dublin Landesbank Hessen-Thueringen International, Dublin Counterparty ratings AAA/A-1+ Commercial Paper A-1+ Helaba Finance B.V. Amsterdam (Gtd: Landesbank Hessen-Thueringen Girozentrale) Senior unsecured debt AAA Helaba International Finance PLC, Dublin (Gtd: Landesbank Hessen-Thueringen Girozentrale) Senior unsecured debt AAA -0- CONTACT: Michael Zlotnik, Frankfurt (49) 69-138709-18 Susan Riska, London (44) 171-826-3526 For more information on criteria or subscriptions: http://www.ratings.standardpoor.com |
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