MIRA
INFORM REPORT
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Report Date : |
20.06.2012 |
IDENTIFICATION DETAILS
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Name : |
BROWN BROTHERS HARRIMAN & CO. |
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Registered Office : |
140 Broadway, |
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Country : |
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Year of Establishment : |
1810 |
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Legal Form : |
Private Parent Company |
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Line of Business : |
Subject is the oldest and largest privately held bank in the
U.S |
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No. of Employees : |
2,400 |
RATING & COMMENTS
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MIRA’s Rating : |
Ba |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
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Status : |
Good |
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Payment Behaviour : |
No Complaints |
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Litigation : |
Clear |
NOTES:
Any query related to this report can be made
on e-mail: infodept@mirainform.com
while quoting report number, name and date.
ECGC Country Risk Classification List – March 31st, 2012
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Country Name |
Previous Rating (31.12.2011) |
Current Rating (31.03.2012) |
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A1 |
A1 |
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Risk Category |
ECGC
Classification |
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Insignificant |
A1 |
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Low |
A2 |
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Moderate |
B1 |
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High |
B2 |
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Very High |
C1 |
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Restricted |
C2 |
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Off-credit |
D |
Company name & address
Brown Brothers Harriman & Co.
140 Broadway
Tel: (212) 483-1818
Fax: (212) 493-8545
Web: www.bbh.com
synthesis
Employees: 2,400
Company Type: Private Parent
Corporate Family: 19
Companies
Incorporation Date: 1810
Financials in: USD
(Millions)
Reporting Currency: US Dollar
Annual Sales: 1,699.8
Total Assets: NA
Business Description
Founded in 1818, Brown Brothers Harriman & Co. (BBH) is
the oldest and largest privately held bank in the
Industry
Industry Investment Services
ANZSIC 2006: 6411 - Financial
Asset Broking Services
NACE 2002: 6712 - Security
broking and fund management
NAICS 2002: 523110 - Investment
Banking and Securities Dealing
UK SIC 2003: 6712 - Security
broking and fund management
US SIC 1987: 6211 - Security
Brokers, Dealers, and Flotation Companies
Key Executives
(Emails Available)
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Name |
Title |
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Glenn E. Baker |
Partner |
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J William Anderson |
Partner |
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Michael Valentine |
Business Analyst |
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Mary Russo |
Admin For Noor Hassan |
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James E Holzer |
Head-Software & Tech Enabled Scvs, Mergers and Acquisitions Grp |
News
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Title |
Date |
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WSJ(6/6) Credit Markets: Junk Bonds Get
Closer Look |
5-Jun-2012 |
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Yen gains after dismal jobs data |
1-Jun-2012 |
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WORLD FOREX:Yen Rallies To Three-Month
High Vs Dollar |
17-May-2012 |
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WSJ(5/16) Currency Trading: Euro Falls
Below $1.28 |
15-May-2012 |
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MARKET TALK: EUR/USD, AUD Facing Downward
Pressure - Strategist |
14-May-2012 |
ABI Number: 001123298
1 - Profit & Loss Item Exchange Rate: USD 1 = USD 1
2 - Balance Sheet Item Exchange Rate: USD 1 = USD 1
Corporate Overview
Location
140 Broadway
Tel: (212) 483-1818
Fax: (212) 493-8545
Web: www.bbh.com
Sales USD(mil): 1,699.8
Assets USD(mil): NA
Employees: 2,400
Industry: Investment Services
Incorporation Date: 1810
Company Type: Private Parent
Quoted Status: Not Quoted
Partner: J
William Anderson
Contents
Industry Codes
Business Description
Brand/Trade Names
Financial Data
Key Corporate Relationships
Additional Information
Industry Codes
ANZSIC 2006 Codes:
6419 - Other Auxiliary Finance and Investment Services
6330 - Superannuation Funds
6240 - Financial Asset Investing
6221 - Banking
6411 - Financial Asset Broking Services
NACE 2002 Codes:
6713 - Activities auxiliary to financial intermediation not
elsewhere classified
6602 - Pension funding
6523 - Other financial intermediation not elsewhere classified
6512 - Other monetary intermediation
6712 - Security broking and fund management
NAICS 2002 Codes:
523110 - Investment Banking and Securities Dealing
525920 - Trusts, Estates, and Agency Accounts
525110 - Pension Funds
525910 - Open-End Investment Funds
523930 - Investment Advice
522190 - Other Depository Credit Intermediation
US SIC 1987:
6733 - Trusts, Except Educational, Religious, and Charitable
6371 - Pension, Health, and Welfare Funds
6211 - Security Brokers, Dealers, and Flotation Companies
6029 - Commercial Banks, Not Elsewhere Classified
6722 - Management Investment Offices, Open-End
6282 - Investment Advice
UK SIC 2003:
6602 - Pension funding
6523 - Other financial intermediation not elsewhere classified
6713 - Activities auxiliary to financial intermediation not
elsewhere classified
6712 - Security broking and fund management
65121 - Banks
Business
Description
Banking Services
More Business
Descriptions
Establishments
primarily engaged in furnishing investment information and advice to companies
and individuals concerning securities and commodities on a contract or fee
basis.
Founded in 1818,
Brown Brothers Harriman & Co. (BBH) is the oldest and largest privately
held bank in the U.S. The Firm is well known for its entrepreneurial thinking,
leading-edge technology and unmatched attention to its clients. BBH is
organized as a general partnership and serves clients in three businesses:
Investor Services & Markets, Wealth & Investment Management and Banking
& Advisory. The Firm operates a global business through seven U.S. and
seven overseas locations. It is headquartered in New York.
Brand/Trade Names
Fx Indexlink - Computers
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Credit Report as of 04/01/2012
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Location |
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140 Broadway Ste: 16 |
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County: |
New York |
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MSA: |
New York, NY |
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Phone: |
212-483-1818 |
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Fax: |
212-493-8429 |
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URL: |
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ABI©: |
001123298 |
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Annual Sales: |
$1,699,839,000 (USD) |
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Employees: |
2,700 |
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Facility Size(ft2): |
40,000+ |
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Facility Own/Lease: |
Lease |
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Business Type: |
Private |
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Location Type: |
Headquarter |
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Primary Line of Business: |
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SIC: |
6282-03 - Financial Advisory Services |
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NAICS: |
523930 - Investment Advice |
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Secondary Lines of Business: |
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SICs: |
6021-01 - Banks |
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6099-15 - Banking Systems & Service-Electronic |
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6163-01 - Loan Brokerage |
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6211-01 - Stock & Bond Brokers |
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6211-11 - Investments |
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6799-98 - Venture Capital Companies |
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8742-13 - Marketing Programs & Services |
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9999-66 - Federal Government Contractors |
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NAICS: |
541613 - Marketing Consulting Svcs |
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522310 - Mortgage & Nonmortgage Loan Brokers |
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523120 - Securities Brokerage |
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522110 - Commercial Banking |
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523910 - Misc Intermediation |
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522320 - Financial Transaction Processing & Clearing |
Table of Contents
Net Charge Inc
140 Broadway
New York, NY 10005-1108
Psilos Group Managers
140 Broadway Ste: 5102
New York, NY 10005-1029
Anthem Capital Funding LLC
140 Broadway
New York, NY 10005-1108
Commodities Futures Trading
140 Broadway Ste: 19
New York, NY 10005-1108
Skate Press Limited
140 Broadway Ste: 4430
New York, NY 10005-1112
BCFS
140 Broadway
New York, NY 10005-1108
First Principles Capital Management
140 Broadway Ste: 1800
New York, NY 10005-1025
P T Bank Rakyat Indonesia
140 Broadway Ste: 3601
New York, NY 10005-1152
Capital Management
140 Broadway Ste: 1800
New York, NY 10005-1102
Interglobal Financial Services Limited
140 Broadway
New York, NY 10005-1108
* Similar Businesses are defined as the closest businesses
sharing the same six-digit primary SIC code ( 6282-03 - Financial Advisory
Services) regardless of size.
Top
Closest Neighbors
ACA Financial Guaranty Corp
600 5th Ave Ste: 2b
New York, NY 10020-2335
Administrative Resource
140 Broadway
New York, NY 10005-1108
AMBILLC
140 Broadway
New York, NY 10005-1108
ADM Investor Services Inc
140 Broadway Ste: 2303
New York, NY 10005-1135
140 BWLLC
140 Broadway
New York, NY 10005-1108
A W Bertsch Inc
140 Broadway
New York, NY 10005-1108
A Trial Lawyer
140 Broadway
New York, NY 10005-1108
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Corporate
Family |
Corporate
Structure News: |
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Brown Brothers Harriman & Co. |
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Company
Name |
Company Type |
Location |
Country |
Industry |
Sales |
Employees |
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Parent |
New York, NY |
United States |
Investment Services |
1,699.8 |
2,400 |
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Subsidiary |
New York, NY |
United States |
Investment Services |
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2,000 |
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Branch |
Boston, MA |
United States |
Investment Services |
144.0 |
1,500 |
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Branch |
Jersey City, NJ |
United States |
Investment Services |
418.6 |
1,300 |
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Subsidiary |
Luxembourg |
Luxembourg |
Investment Services |
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230 |
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Subsidiary |
London |
United Kingdom |
Miscellaneous Financial Services |
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130 |
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Subsidiary |
London |
United Kingdom |
Investment Services |
51.4 |
97 |
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Subsidiary |
London |
United Kingdom |
Business Services |
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Branch |
Philadelphia, PA |
United States |
Miscellaneous Financial Services |
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70 |
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Subsidiary |
Dublin |
Ireland |
Miscellaneous Financial Services |
39.5 |
51 |
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Subsidiary |
Tokyo |
Japan |
Investment Services |
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50 |
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Subsidiary |
Zurich |
Switzerland |
Miscellaneous Financial Services |
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50 |
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Branch |
Centennial, CO |
United States |
Investment Services |
6.4 |
20 |
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Branch |
Chicago, IL |
United States |
Investment Services |
4.8 |
15 |
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Branch |
Charlotte, NC |
United States |
Investment Services |
4.8 |
15 |
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Subsidiary |
Central, Hong Kong |
Hong Kong |
Investment Services |
1.0 |
9 |
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Branch |
Boston, MA |
United States |
Investment Services |
1.0 |
3 |
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Branch |
Boston, MA |
United States |
Investment Services |
1.0 |
3 |
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Subsidiary |
Georgetown, Grand Cayman |
Cayman Islands |
Miscellaneous Financial Services |
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Competitors
Report |
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CompanyName |
Location |
Employees |
Ownership |
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Citigroup Inc. |
New York, New York, United States |
263,000 |
Public |
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Deutsche Bank AG |
Frankfurt Am Main, Germany |
100,682 |
Public |
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JPMorgan Chase & Co. |
New York, New York, United States |
261,453 |
Public |
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Northern Trust Corporation |
Chicago, Illinois, United States |
14,100 |
Public |
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The Bank of New York Mellon Corp. |
New York, New York, United States |
47,800 |
Public |
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UBS AG |
Zuerich, Switzerland |
64,243 |
Public |
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UnionBanCal Corporation |
San Francisco, California, United States |
10,437 |
Private |
Executive report
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Board of
Directors |
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Director |
Director/Board Member |
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Director |
Director/Board Member |
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Executives |
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VP & Mgr-Relationship-Charlotte |
Division Head Executive |
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Head of International for Wealth Management |
Division Head Executive |
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Head, Mutual Fund Business Development |
Division Head Executive |
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Head-Relationship Mgmt & Sls-Asia |
Division Head Executive |
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Director Equity Trading Operations |
Operations Executive |
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Admin For Noor Hassan |
Administration Executive |
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Partner |
Finance Executive |
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Managing Director |
Finance Executive |
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Managing Director |
Finance Executive |
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Managing Director |
Finance Executive |
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Partner |
Finance Executive |
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Managing Director |
Finance Executive |
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Partner |
Finance Executive |
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Partner |
Finance Executive |
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Partner |
Finance Executive |
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Partner |
Finance Executive |
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Partner |
Finance Executive |
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Partner |
Finance Executive |
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Occupancy Controller |
Controller |
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Recruitment Relationship Manager, Human
Capital Management |
Human Resources Executive |
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Recruiter |
Human Resources Executive |
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Vice President Director Recruiting |
Human Resources Executive |
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Training Coordinator |
Training Executive |
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Fund Account Manager |
Sales Executive |
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Information Technology Professional |
Information Executive |
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Head-Software & Tech Enabled Scvs,
Mergers and Acquisitions Grp |
Information Executive |
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Systems Liason |
Information Executive |
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Technical |
Engineering/Technical Executive |
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Research Associate |
Research & Development Executive |
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Research Analyst |
Research & Development Executive |
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Business Analyst |
Business Development Executive |
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Partner |
Partner |
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Partner |
Partner |
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Partner |
Partner |
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Partner |
Partner |
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Partner |
Partner |
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Partner |
Partner |
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Partner |
Partner |
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Partner |
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Partner |
Partner |
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Portfolio Manager |
Other |
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Portfolio Manager |
Other |
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Mq Team Leader |
Other |
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Helpdesk Support |
Other |
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Repo Trader |
Other |
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Altern Invest |
Other |
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Portfolio Management |
Other |
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Staffing |
Other |
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Senior Vice President |
Other |
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Portfolio Manager |
Other |
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Associate |
Other |
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Repo Trader |
Other |
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Portfolio Management |
Other |
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Trader |
Other |
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Senior Associate |
Other |
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Associate |
Other |
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MARKET TALK:
EUR/USD, AUD Facing Downward Pressure - Strategist
Nikkei English
News
14 May 2012
[What follows is
the full text of the news story.]
0202 GMT [Dow
Jones] Dampened risk sentiment is weighing on the EUR/USD as risk-off sentiment
is leading to USD buying, althought the pair may have difficulty moving too
much before the release of eurozone GDP data later today, says Masashi Murata,
senior currency strategist at Brown Brothers Harriman in Tokyo, tipping the
pair in a 1.2700-1.2850 band for the day. The AUD/JPY is also down following
the release of the RBA minutes, which showed that lower-than-expected inflation
and weak economic growth were some reasons behind a bigger-than-expected 50bp
cut in interest rates on May 1. "The contents of the minutes weren't
really surprising, but the market seems to have reacted to it anyway," he
says. The AUD/JPY fell from 79.65 to 79.39, and is now at 79.47. The EUR/USD is
now at 1.2821 from an earlier high of 1.2838. (alexander.martin@dowjones.com)
U.S. dollar drops
vs. Canadian unit after data
MarketWatch
Bullets
11 May 2012
[What follows is
the full text of the news story.]
NEW YORK
(MarketWatch) -- The Canadian dollar jumped on Friday, pushing the U.S. unit
back under parity after a government report showed the country's economy added
58,000 jobs in April, way more than the 10,000 jobs expected by analysts,
according to Brown Brothers Harriman. It's the second month of very strong jobs
gains for the country, and most of the month's gains were in full-time
employment, according to Statistics Canada. The unemployment rate rose to 7.3%
from 7.2% as more people joined the workforce, the report said. The U.S. dollar
usdcad bought 99.97 Canadian cents, from 1.0047 Canadian dollars before the
report and down 0.4% on the day. The greenback was last under 1 Canadian dollar
four days ago, and has spent most of the year under that level.
MARKET TALK:
Expect Only Verbal Interventions From Japan -BBH
Nikkei English
News
01 May 2012
[What follows is
the full text of the news story.]
8:44 (Dow Jones)
Brown Brothers Harriman says the yen's recent rally is due mainly to the Bank
of Japan's lack of aggressive easing and the narrowing of the US-Japan 2-year
yield spread, which is currently at about half its mid-March peak. Breaking
through Y79.15, a key retracement level of the February-March rally, would
clear the way for the dollar to fall to Y76, the investment bank contends. But
given that the BoJ missed some "golden opportunities" to weaken the
yen when momentum was in its favor earlier this year, BBH doesn't it see it
being likely now. "Intervention now would simply signal a return to tactics
that have not worked. Look for increased verbal intervention as we approach
Y79." The dollar is at Y79.81, little changed from late Monday, according
to EBS via CQG. (matt.walter@dowjones.com)
Standard
& Poor’s
|
United
States of America Long-Term Rating Lowered To 'AA+' Due To Political Risks,
Rising Debt Burden; Outlook Negative |
|
Publication
date: 05-Aug-2011 20:13:14 EST |
·
We have lowered our long-term
sovereign credit rating on the United States of America to 'AA+' from 'AAA' and
affirmed the 'A-1+' short-term rating.
·
We have also removed both the short- and long-term ratings
from CreditWatch negative.
·
The downgrade reflects our opinion that the fiscal
consolidation plan that Congress and the Administration recently agreed to
falls short of what, in our view, would be necessary to stabilize the
government's medium-term debt dynamics.
·
More broadly, the downgrade reflects our view that the
effectiveness, stability, and predictability of American policymaking and
political institutions have weakened at a time of ongoing fiscal and economic
challenges to a degree more than we envisioned when we assigned a negative
outlook to the rating on April 18, 2011.
·
Since then, we have changed our view of the difficulties in
bridging the gulf between the political parties over fiscal policy, which makes
us pessimistic about the capacity of Congress and the Administration to be able
to leverage their agreement this week into a broader fiscal consolidation plan
that stabilizes the government's debt dynamics any time soon.
·
The outlook on the long-term rating is negative. We could
lower the long-term rating to 'AA' within the next two years if we see that
less reduction in spending than agreed to, higher interest rates, or new fiscal
pressures during the period result in a higher general government debt
trajectory than we currently assume in our base case.
TORONTO (Standard &
Poor's) Aug. 5, 2011--Standard & Poor's Ratings Services said today that it
lowered its long-term sovereign credit rating on the United States of America
to 'AA+' from 'AAA'. Standard & Poor's also said that the outlook on the
long-term rating is negative. At the same time, Standard & Poor's affirmed
its 'A-1+' short-term rating on the U.S. In addition, Standard & Poor's
removed both ratings from CreditWatch, where they were placed on July 14, 2011,
with negative implications.
The
transfer and convertibility (T&C) assessment of the U.S.--our assessment of
the likelihood of official interference in the ability of U.S.-based public-
and private-sector issuers to secure foreign exchange for
debt service--remains
'AAA'.
We lowered our long-term
rating on the U.S. because we believe that the prolonged controversy over
raising the statutory debt ceiling and the related fiscal policy debate
indicate that further near-term progress containing the growth in public
spending, especially on entitlements, or on reaching an agreement on raising
revenues is less likely than we previously assumed and will remain a
contentious and fitful process. We also believe that the fiscal consolidation
plan that Congress and the Administration agreed to this week falls short of
the amount that we believe is necessary to stabilize the general government
debt burden by the middle of the decade.
Our lowering of the
rating was prompted by our view on the rising public debt burden and our
perception of greater policymaking uncertainty, consistent with our criteria
(see "Sovereign Government Rating Methodology and
Assumptions ," June 30, 2011,
especially Paragraphs 36-41). Nevertheless, we view the U.S. federal
government's other economic, external, and monetary credit attributes, which
form the basis for the sovereign rating, as broadly unchanged.
We have taken the ratings
off CreditWatch because the Aug. 2 passage of the Budget Control Act Amendment
of 2011 has removed any perceived immediate threat of payment default posed by
delays to raising the government's debt ceiling. In addition, we believe that
the act provides sufficient clarity to allow us to evaluate the likely course
of U.S. fiscal policy for the next few years.
The
political brinksmanship of recent months highlights what we see as America's
governance and policymaking becoming less stable, less effective, and less
predictable than what we previously believed. The statutory debt ceiling and
the threat of default have become political bargaining chips in the debate over
fiscal policy. Despite this year's wide-ranging debate, in our view, the
differences between political parties have proven to be extraordinarily
difficult to bridge, and, as we see it, the resulting agreement fell well short
of the comprehensive fiscal consolidation program that some proponents had
envisaged until quite recently. Republicans and Democrats have only been able
to agree to relatively modest savings on discretionary spending while
delegating to the Select Committee decisions on more comprehensive measures. It
appears that for now, new revenues have dropped down on the menu of policy
options. In addition, the plan envisions only minor policy changes on Medicare
and little change in other entitlements,
the containment of which
we and most other independent observers regard as key to long-term fiscal
sustainability.
Our opinion is that
elected officials remain wary of tackling the structural issues required to
effectively address the rising U.S. public debt burden in a manner consistent
with a 'AAA' rating and with 'AAA' rated sovereign peers (see Sovereign Government Rating Methodology and
Assumptions," June 30, 2011,
especially Paragraphs 36-41). In our view, the difficulty in framing a
consensus on fiscal policy weakens the government's ability to manage public
finances and diverts attention from the debate over how to achieve more
balanced and dynamic economic growth in an era of fiscal stringency and
private-sector deleveraging (ibid). A new political consensus might (or might
not) emerge after the 2012 elections, but we believe that by then, the
government debt burden will likely be higher, the needed medium-term fiscal
adjustment potentially greater, and the inflection point on the U.S.
population's demographics and other age-related spending drivers closer at hand
(see "Global Aging 2011: In The U.S., Going Gray Will Likely
Cost Even More Green, Now,"
June 21, 2011).
Standard & Poor's
takes no position on the mix of spending and revenue measures that Congress and
the Administration might conclude is appropriate for putting the U.S.'s
finances on a sustainable footing.
The act calls for as much
as $2.4 trillion of reductions in expenditure growth over the 10 years through
2021. These cuts will be implemented in two steps: the $917 billion agreed to
initially, followed by an additional $1.5 trillion that the newly formed
Congressional Joint Select Committee on Deficit Reduction is supposed to
recommend by November 2011. The act contains no measures to raise taxes or
otherwise enhance revenues, though the committee could recommend them.
The act further provides
that if Congress does not enact the committee's recommendations, cuts of $1.2
trillion will be implemented over the same time period. The reductions would
mainly affect outlays for civilian discretionary spending, defense, and
Medicare. We understand that this fall-back mechanism is designed to encourage
Congress to embrace a more balanced mix of expenditure savings, as the
committee might recommend.
We note that in a letter
to Congress on Aug. 1, 2011, the Congressional Budget Office (CBO) estimated
total budgetary savings under the act to be at least $2.1 trillion over the
next 10 years relative to its baseline assumptions. In updating our own fiscal
projections, with certain modifications outlined below, we have relied on the
CBO's latest "Alternate Fiscal Scenario" of June 2011, updated to
include the CBO assumptions contained in its Aug. 1 letter to Congress. In
general, the CBO's "Alternate Fiscal Scenario" assumes a continuation
of recent Congressional action overriding existing law.
We view the act's
measures as a step toward fiscal consolidation. However, this is within the
framework of a legislative mechanism that leaves open the details of what is
finally agreed to until the end of 2011, and Congress and the Administration
could modify any agreement in the future. Even assuming that at least $2.1
trillion of the spending reductions the act envisages are implemented, we
maintain our view that the U.S. net general government debt burden (all levels
of government combined, excluding liquid financial assets) will likely continue
to grow. Under our revised base case fiscal scenario--which we consider to be
consistent with a 'AA+' long-term rating and a negative outlook--we now project
that net general government debt would rise from an estimated 74% of GDP by the
end of 2011 to 79% in 2015 and 85% by 2021. Even the projected 2015 ratio of
sovereign indebtedness is high in relation to those of peer credits and, as
noted, would continue to rise under the act's revised policy settings.
Compared with previous
projections, our revised base case scenario now assumes that the 2001 and 2003
tax cuts, due to expire by the end of 2012, remain in place. We have changed
our assumption on this because the majority of Republicans in Congress continue
to resist any measure that would raise revenues, a position we believe Congress
reinforced by passing the act. Key macroeconomic assumptions in the base case
scenario include trend real GDP growth of 3% and consumer price inflation near
2% annually over the decade.
Our revised upside
scenario--which, other things being equal, we view as consistent with the
outlook on the 'AA+' long-term rating being revised to stable--retains these
same macroeconomic assumptions. In addition, it incorporates $950 billion of
new revenues on the assumption that the 2001 and 2003 tax cuts for high earners
lapse from 2013 onwards, as the Administration is advocating. In this scenario,
we project that the net general government debt would rise from an estimated
74% of GDP by the end of 2011 to 77% in 2015 and to 78% by 2021.
Our revised downside
scenario--which, other things being equal, we view as being consistent with a
possible further downgrade to a 'AA' long-term rating--features less-favorable
macroeconomic assumptions, as outlined below and also assumes that the second
round of spending cuts (at least $1.2 trillion) that the act calls for does not
occur. This scenario also assumes somewhat higher nominal interest rates for
U.S. Treasuries. We still believe that the role of the U.S. dollar as the key
reserve currency confers a government funding advantage, one that could change
only slowly over time, and that Fed policy might lean toward continued loose
monetary policy at a time of fiscal tightening. Nonetheless, it is possible
that interest rates could rise if investors re-price relative risks. As a
result, our alternate scenario factors in a 50 basis point (bp)-75 bp rise in
10-year bond yields relative to the base and upside cases from 2013 onwards. In
this scenario, we project the net public debt burden would rise from 74% of GDP
in 2011 to 90% in 2015 and to 101% by 2021.
Our revised scenarios
also take into account the significant negative revisions to historical GDP
data that the Bureau of Economic Analysis announced on July 29. From our
perspective, the effect of these revisions underscores two related points when
evaluating the likely debt trajectory of the U.S. government. First, the
revisions show that the recent recession was deeper than previously assumed, so
the GDP this year is lower than previously thought in both nominal and real
terms. Consequently, the debt burden is slightly higher. Second, the revised
data highlight the sub-par path of the current economic recovery when compared
with rebounds following previous post-war recessions. We believe the sluggish
pace of the current economic recovery could be consistent with the experiences
of countries that have had financial crises in which the slow process of debt
deleveraging in the private sector leads to a persistent drag on demand. As a
result, our downside case scenario assumes relatively modest real trend GDP
growth of 2.5% and inflation of near 1.5% annually going forward.
When comparing the U.S.
to sovereigns with 'AAA' long-term ratings that we view as relevant
peers--Canada, France, Germany, and the U.K.--we also observe, based on our base
case scenarios for each, that the trajectory of the U.S.'s net public debt is
diverging from the others. Including the U.S., we estimate that these five
sovereigns will have net general government debt to GDP ratios this year
ranging from 34% (Canada) to 80% (the U.K.), with the U.S. debt burden at 74%.
By 2015, we project that their net public debt to GDP ratios will range between
30% (lowest, Canada) and 83% (highest, France), with the U.S. debt burden at
79%. However, in contrast with the U.S., we project that the net public debt
burdens of these other sovereigns will begin to decline, either before or by
2015.
Standard & Poor's
transfer T&C assessment of the U.S. remains 'AAA'. Our T&C assessment
reflects our view of the likelihood of the sovereign restricting other public
and private issuers' access to foreign exchange needed to meet debt service.
Although in our view the credit standing of the U.S. government has
deteriorated modestly, we see little indication that official interference of
this kind is entering onto the policy agenda of either Congress or the
Administration. Consequently, we continue to view this risk as being highly
remote.
The outlook on the
long-term rating is negative. As our downside alternate fiscal scenario
illustrates, a higher public debt trajectory than we currently assume could
lead us to lower the long-term rating again. On the other hand, as our upside
scenario highlights, if the recommendations of the Congressional Joint Select
Committee on Deficit Reduction--independently or coupled with other
initiatives, such as the lapsing of the 2001 and 2003 tax cuts for high
earners--lead to fiscal consolidation measures beyond the minimum mandated, and
we believe they are likely to slow the deterioration of the government's debt dynamics,
the long-term rating could stabilize at 'AA+'.
FOREIGN EXCHANGE RATES
|
Currency |
Unit
|
Indian Rupees |
|
US Dollar |
1 |
Rs.56.01 |
|
UK Pound |
1 |
Rs.87.85 |
|
Euro |
1 |
Rs.70.54 |
INFORMATION DETAILS
|
Report Prepared
by : |
MNL |
RATING EXPLANATIONS
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
>86 |
Aaa |
Possesses an extremely sound financial base with the strongest
capability for timely payment of interest and principal sums |
Unlimited |
|
71-85 |
Aa |
Possesses adequate working capital. No caution needed for credit
transaction. It has above average (strong) capability for payment of interest
and principal sums |
Large |
|
56-70 |
A |
Financial & operational base are regarded healthy. General
unfavourable factors will not cause fatal effect. Satisfactory capability for
payment of interest and principal sums |
Fairly Large |
|
41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
|
26-40 |
B |
Capability to overcome financial difficulties seems comparatively
below average. |
Small |
|
11-25 |
Ca |
Adverse factors are apparent. Repayment of interest and principal sums
in default or expected to be in default upon maturity |
Limited with
full security |
|
<10 |
C |
Absolute credit risk exists. Caution needed to be exercised |
Credit not
recommended |
|
---- |
NB |
New Business |
---- |
This score serves as a reference to assess SC’s credit risk
and to set the amount of credit to be extended. It is calculated from a
composite of weighted scores obtained from each of the major sections of this
report. The assessed factors and their relative weights (as indicated through
%) are as follows:
Financial
condition (40%) Ownership
background (20%) Payment
record (10%)
Credit history
(10%) Market trend
(10%) Operational
size (10%)s
This report is issued at your request without any
risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL)
or its officials.