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Posts Tagged ‘Moody’s’

Moody’s says downgrades BP’s credit rating three notches

In Uncategorized on June 18, 2010 at 12:22 pm

International ratings agency Moody’s downgraded the creditworthiness of BP by three notches on Friday, reflecting “the worsening impact” of the Gulf of Mexico oil spill on the group’s finances.

An oil-soaked bird struggles against the side of an Iron Horse supply vessel at the site of the oil spill off Louisiana on May 9.

“Moody’s Investors Service has today downgraded the senior unsecured ratings of BP and of all long-term debt securities issued by its subsidiaries and guaranteed by BP by three notches to A2 from Aa2,” said a statement.

The downgrades, which follow similar moves this week by Fitch and Standard & Poor’s, will increase the cost of BP’s borrowing as investors demand higher returns for taking greater risk.

Moody’s said that its downgrade “reflects the worsening impact expected from the oil pouring into the Gulf of Mexico from BP’s subsea Macondo well”.

It added: “Moody’s updated assessment is that the spill will have a sustained negative impact on the group’s free cash flow generation and overall financial profile for a number of years.

“This assessment reflects a substantial upward revision of the estimated size of the leak, the continued failure to bring the leaking Macondo well under control, and the mounting costs and claims for damages.

“Moody’s believes that costs for containment, clean-up, litigation and fines are likely to be higher than the rating agency had previously expected in view of the widespread and continuing physical and economic damage.”


Source: SGGP

Moody’s upgrades S.Korea bond rating

In Uncategorized on April 14, 2010 at 7:34 am

SEOUL, April 14, 2010 (AFP) – Global agency Moody’s said Wednesday it has upgraded its rating on South Korea’s government bonds following the country’s exceptional resilience to the global economic crisis.

Moody’s Investors Service said in a statement it has changed the ratings to A1 from A2 and maintains a stable outlook.

“The change has been prompted by Korea’s demonstration of an exceptional level of economic resilience to the global crisis, while containing the government’s budget deficit,” said senior vice president Tom Byrne.

Moody’s said the economy was responding rapidly to the improving global outlook and the government had put policy measures in place which should help sustain economic growth over time.

Source: SGGP

Top economies to keep best ratings: Moody’s

In World on September 10, 2009 at 8:02 am

LONDON, Sept 9, 2009 (AFP) – International ratings agency Moody’s on Wednesday said it was now unlikely to downgrade the world’s leading economies in the near future as the global economy shows signs of improvement.

But the agency also warned that high debt levels are a serious risk.

“While almost all Aaa-rated sovereigns have been severely hit by the global economic and financial crisis, further downgrades are unlikely over the near term,” Moody’s Investors Service said in its “Aaa Sovereign Monitor” report.

“Although highly unlikely, it is conceivable that a large and wealthy economy could lose its Aaa rating if it were to experience a material and irreversible deterioration in its debt conditions over the next five years or so,” said Pierre Cailleteau, managing director of Moody’s Sovereign Risk Group.

Countries given Moody’s top Aaa rating include Britain, Germany, Spain and the United States. During the financial crisis Moody’s has additionally described these nations as either “resistant,” “resilient” or “vulnerable”.

“Moody’s does not expect rating downgrades in the near future, especially after the recent downgrade of Ireland (from Aaa to Aa1 with negative outlook) which had been the most ‘vulnerable’ Aaa,” said Cailleteau.

“Spain, the other ‘vulnerable’ Aaa, for now retains a safe distance from the Aaa-Aa demarcation line, mainly because potential growth is not likely to be as low as anticipated and also because the government’s balance sheet was comparatively solid at the beginning of the crisis,” Cailleteau added.

Moody’s said it believed Britain and US continued to warrant the “resilient” characterization.

“However, to retain their “resilient” status, the UK and US will need to severely adjust their fiscal policies, even in the unlikely event of a vigorous rebound in their economies.”

Cailleteau added: “In the case of the US in particular, Moody’s maintains the view that — once there is a consensus on the need to address fiscal imbalances — the country continues to have an exceptional relative ability to grow out of its debt and its capacity to cut spending and/or raise taxes also remains significant.”

Source: SGGP