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’Moody’s vs Europe — in full
Posted by Joseph Cotterill on Feb 13 23:48. Comment.Spain and Italy downgraded, France (and the UK) on negative outlook. The EFSF affirmed. A slew of Moody’s ratings actions on the eurozone crisis late on Monday…
(Click image for full ratings More…
Fitch cuts Italy and Spain two notches
Posted by Joseph Cotterill on Jan 27 18:19. Comment.Five eurozone sovereigns (but not France!) downgraded by Fitch on Friday…
-Belgium LT IDR downgraded to ‘AA’ from ‘AA+’; Negative Outlook; ST IDR affirmed at ‘F1+’
-Cyprus LT IDR downgraded to ‘BBB-’ from ‘BBB’; More…
BHL sur le late AAA
Posted by Joseph Cotterill on Jan 19 09:02. Comment.Sorry… we can’t resist:
And here is a firm, still Standard and Poor’s, whose criteria of appreciation are marked by subjectivity, as is the case for every human endeavor, one whose methodologies are not only vague, More…
Rate as I say, not as I do
Posted by Joseph Cotterill on Jan 13 17:53. Comment.From the European Commission in November:
2. More transparent and more frequent sovereign debt ratings.
Member States would be rated more frequently (every six months rather than 12 months) and investors and Member States would be informed of the underlying facts and assumptions on each rating. More…
Single point of failure
Posted by Joseph Cotterill on Jul 27 16:19. Comment.
(Chart from a Fitch report. Background here, here — and here.)
In a dark, dark wood — Sino-Forest ratings edition
Posted by Joseph Cotterill on Jul 14 09:30. Comment.Interesting rating action by Fitch on Thursday:
Fitch Ratings-Hong Kong/Singapore-14 July 2011: Fitch Ratings has withdrawn Sino-Forest Corporation’s (Sino-Forest) Foreign Currency Issuer Default Rating and senior unsecured debt rating of ‘BB-’. More…
Dumping Ireland
Posted by Joseph Cotterill on Jul 13 09:00. Comment.Compare:
Contrast:
Confusing. Actually, the NTMA is right that S&P and Fitch still rate Ireland BBB+, on stable outlooks. So it might not be obliged to leave indices for a while yet. On the other hand bond prices have collapsed in the last month during the Greek debt rollover debacle anyway. More…
Ratings deleveraging
Posted by Tracy Alloway on Jul 11 12:20. Comment.As goes Europe’s central bank, so go financial markets?
The ECB decided last week that it would drop its minimum rating requirements for Portuguese collateral, after credit rating agency Moody’s downgraded the eurozone peripheral four notches to Ba2. More…
Ratings logic at the European Commission — in selective default
Posted by Joseph Cotterill on Jul 06 13:07. Comment.What with the ECB on Greece, and Moody’s on Portugal, it’s been a week to remember the ancient adage (ahem) that “ratings don’t kill sovereigns, ratings users do.”
Predictably, the European Commission didn’t care on Wednesday: More…
Overnight sovereign defaults? It must be the super-credible ECB
Posted by Joseph Cotterill on Jul 05 13:01. Comment.Alternative title: The European Central Bank — true maestros of ratings shopping, as bad now as the Fed in the crisis.
There’s a further element to the central bank’s sudden rediscovery of its ability to pick the single best rating produced by agencies for the valuation of collateral, More…
Things affected by a US downgrade
Posted by Tracy Alloway on Jul 04 15:29. Comment.Fannie Mae, Freddie Mac, FHLBs.
Liabilities guaranteed by the FDIC.
Some pre-funded municipal bonds.
Federal lease transactions.
Certain structured finance deals.
Some Israeli government bonds. More…
The sovereign ratings in this restaurant are terrible. And such small portions! [updated]
Posted by Joseph Cotterill on Jul 04 12:37. Comment.
Ratings don’t kill sovereigns – ratings users do.
There’s an aphorism we’d like observers to remember, as we digest S&P’s warning that the French banks’ Greek debt rollover plan is a sovereign default. More…
Ratings pain in a Greek reprofiling/rollover
Posted by Joseph Cotterill on Jun 03 14:53. Comment.And rolling over Greek bonds (by reinvesting maturing ones into brand-new issuance) is, in terms of ratings, probably on more of a knife-edge than you’d think.
‘Vienna Initiative-style rollover’ is slowly taking over from ‘reprofiling’ as the solution to Greek debt maturing 2012-13. More…
A warning on rapid Chinese credit expansion from Fitch
Posted by Izabella Kaminska on Apr 13 18:01. Comment.There were some extremely sobering thoughts from Fitch on Wednesday related to the scale of China’s mega lending boom of the last few years.
On Tuesday the rating agency affirmed China’s A+ Long-Term Foreign Currency and AA- Long-Term Local Currency sovereign debt ratings, More…
When sovereign ratings turn on a dime
Posted by Joseph Cotterill on Mar 29 17:15. Comment.Remember this chart from Exotix, comparing periphery ratings and bond spreads to frontier markets? One of the pair looks out of place:
So what happens when rating agencies do something about it?
Win Thin of Brown Brothers Harriman dipped into history on Tuesday, More…
Bond buyback irony in Europe
Posted by Joseph Cotterill on Mar 24 13:10. Comment.Strange days when a specialist in frontier market sovereigns has the most convincing advice on how to fix the western European ones…
We’ve often delved — at length — into the mechanics of using bond buybacks to achieve debt reduction for the eurozone periphery. More…
Peripheral debt — more corporate connections
Posted by Joseph Cotterill on Mar 03 16:01. Comment.Further to the different reactions of Portuguese corporates to their sovereign’s plight in the market — courtesy of Fitch, here’s a handy tabulation of corporate liquidity across the periphery:
(Click to enlarge)
Corporates are far from equally exposed to peripheral economies by revenue (Spanish utilities and Latin American operations, More…
Portugal’s broken debt, the corporate connection [updated]
Posted by Joseph Cotterill on Mar 03 11:26. Comment.When a sovereign can’t sustainably issue its own debt in markets, the problem is that neither can sovereign-linked companies.
So spare a thought for REFER, Portugal’s state-owned railway infrastructure company: More…
SEC downgrades credit rating agencies
Posted by John McDermott on Feb 09 15:50. Comment.The first of the 12 steps is to admit powerlessness; the second is to believe that a power stronger than yourselves can restore sanity.
While Dodd-Frank recognised the addictive and palliative qualities of CRA ratings, More…
Fix the EFSF – lose the triple-A?
Posted by Tracy Alloway on Jan 17 12:48. Comment.Here’s an elegant, if controversial, solution to the limits of the EFSF.
The European Financial Stability Facility (EFSF), as we’ve written at length, largely resembles a giant CDO. It’s overcollateralised by 20 per cent to achieve a triple-A rating, More…
Why this Greek debt junking matters
Posted by Joseph Cotterill on Jan 14 18:25. Comment.Q. No matter how big your sovereign bailout fund gets — isn’t it far more important that it’s actually sustainable to refinance its loans?
A. Ask Fitch, which has just become the last of the three big ratings agencies to junk Greece’s credit (it’s now rated B+ BB+). More…
Fitch brings Hungary a little bit closer to junk
Posted by Joseph Cotterill on Dec 23 12:50. Comment.You know how we really don’t see the case for Hungarian government bonds? Here’s Fitch’s take. The agency downgraded Hungary’s credit rating to BBB- on Thursday.
Which means all three of the big credit rating agencies now hold the country just a notch above junk status. More…
Rollover is all, Moody’s fears for Portugal edition
Posted by Joseph Cotterill on Dec 21 08:45. Comment.Have you noticed? There’s something (other than an unusual frequency) about recent Moody’s ratings actions on eurozone peripheral sovereigns.
They’re all increasingly focused on whether the sovereigns can actually maintain market access in the first place, More…
The SEC and the end of credit ratings in ABS
Posted by Cardiff Garcia on Nov 24 20:24. Comment.Perhaps a bit of a rewind would be helpful towards understanding the significance of the SEC’s decision to indefinitely allow ABS issuance without the previously required ratings disclosures.
Remember all the kerfuffle earlier this year over Rule 436(g)? That was the provision in the Securities Act of 1933 that protected rating agencies against “expert liability”. More…
Rating Europe’s sovereigns, the polite way
Posted by Jennifer Thompson on Nov 05 15:30. Comment.Just as eurozone peripherals are wobbling, it’s a timely moment to take a look at what the European Commission is saying as it launches consultation on credit rating agencies.
Including some thoughts on the creation of a new European CRA — which might even, More…
S&P no longer negative on Britain’s AAA
Posted by Joseph Cotterill on Oct 26 12:00. Comment.More good news for the UK / One for the credit rating nerds, this.
Standard & Poor’s has affirmed the UK’s AAA credit rating (yawn). However, the agency’s also altered its outlook from negative to stable. More…
Kill the old, AAA-rated edition
Posted by Joseph Cotterill on Oct 08 16:48. Comment.Imagine a financial system without a single AAA-rated sovereign:
Then read Standard & Poor’s latest report on global ageing, which uses exactly that scenario to warn governments before it starts chopping up their credit ratings in the coming decades. More…
Read my lips: no more ratings
Posted by Guest writer on Sep 22 09:15. Comment.Lisa Pollack, credit data analyst at Markit, takes a closer look at the Dodd-Frank reform bill and its implications for credit ratings.
Relax, take a deep breath, and imagine a world without credit ratings. More…
Europe’s SPV is Aaa, says Moody’s (phew)
Posted by Izabella Kaminska on Sep 20 08:59. Comment.H/T to our FT colleague Anousha Sakoui, for directing us to what appears to be the first official rating for the European Financial Stability Facility –courtesy of Moody’s on Monday.
The rating agency has awarded the facility– as was largely expected and intended by European policymakers — a provisional Aaa rating. More…
Fitch catches the BP knife
Posted by Joseph Cotterill on Sep 08 11:16. Comment.Fitch had a present for BP ahead of the oil giant’s publication of its internal inquiry into the Macondo explosion – raising its rating back to A from BBB, having downgraded at the height of the oil spill crisis. More…