|
Report Date : |
16.02.2013 |
IDENTIFICATION DETAILS
|
Name : |
FEDERAL SIGNAL CORPORATION |
|
|
|
|
Registered Office : |
1415 West 22nd Street, Ste 1100, Oak Brook, IL 60523 |
|
|
|
|
Country : |
United States |
|
|
|
|
Date of Incorporation : |
31.01.1969 |
|
|
|
|
Legal Form : |
Public Company |
|
|
|
|
Line of Business : |
Designs and manufactures a suite of
products and integrated solutions in the United States, Europe, and Canada. |
|
|
|
|
No. of Employees : |
2919 |
RATING & COMMENTS
|
MIRA’s Rating : |
Ba |
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
|
Status : |
Satisfactory |
|
|
|
|
Payment Behaviour : |
No complaints |
|
|
|
|
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 – June 30th, 2012
|
Country Name |
Previous Rating (31.03.2012) |
Current Rating (30.06.2012) |
|
United States |
A1 |
A1 |
|
Risk Category |
ECGC
Classification |
|
Insignificant |
A1 |
|
Low |
A2 |
|
Moderate |
B1 |
|
High |
B2 |
|
Very High |
C1 |
|
Restricted |
C2 |
|
Off-credit |
D |
United States - ECONOMIC OVERVIEW
The US has the largest and most technologically powerful economy in the world, with a per capita GDP of $48,100. In this market-oriented economy, private individuals and business firms make most of the decisions, and the federal and state governments buy needed goods and services predominantly in the private marketplace. US business firms enjoy greater flexibility than their counterparts in Western Europe and Japan in decisions to expand capital plant, to lay off surplus workers, and to develop new products. At the same time, they face higher barriers to enter their rivals' home markets than foreign firms face entering US markets. US firms are at or near the forefront in technological advances, especially in computers and in medical, aerospace, and military equipment; their advantage has narrowed since the end of World War II. The onrush of technology largely explains the gradual development of a "two-tier labor market" in which those at the bottom lack the education and the professional/technical skills of those at the top and, more and more, fail to get comparable pay raises, health insurance coverage, and other benefits. Since 1975, practically all the gains in household income have gone to the top 20% of households. Since 1996, dividends and capital gains have grown faster than wages or any other category of after-tax income. Imported oil accounts for nearly 55% of US consumption. Oil prices doubled between 2001 and 2006, the year home prices peaked; higher gasoline prices ate into consumers' budgets and many individuals fell behind in their mortgage payments. Oil prices increased another 50% between 2006 and 2008. In 2008, soaring oil prices threatened inflation and caused a deterioration in the US merchandise trade deficit, which peaked at $840 billion. In 2009, with the global recession deepening, oil prices dropped 40% and the US trade deficit shrank, as US domestic demand declined, but in 2011 the trade deficit ramped back up to $803 billion, as oil prices climbed once more. The global economic downturn, the sub-prime mortgage crisis, investment bank failures, falling home prices, and tight credit pushed the United States into a recession by mid-2008. GDP contracted until the third quarter of 2009, making this the deepest and longest downturn since the Great Depression. To help stabilize financial markets, in October 2008 the US Congress established a $700 billion Troubled Asset Relief Program (TARP). The government used some of these funds to purchase equity in US banks and industrial corporations, much of which had been returned to the government by early 2011. In January 2009 the US Congress passed and President Barack OBAMA signed a bill providing an additional $787 billion fiscal stimulus to be used over 10 years - two-thirds on additional spending and one-third on tax cuts - to create jobs and to help the economy recover. In 2010 and 2011, the federal budget deficit reached nearly 9% of GDP; total government revenues from taxes and other sources are lower, as a percentage of GDP, than that of most other developed countries. The wars in Iraq and Afghanistan required major shifts in national resources from civilian to military purposes and contributed to the growth of the US budget deficit and public debt - through 2011, the direct costs of the wars totaled nearly $900 billion, according to US government figures. In March 2010, President OBAMA signed into law the Patient Protection and Affordable Care Act, a health insurance reform bill that will extend coverage to an additional 32 million American citizens by 2016, through private health insurance for the general population and Medicaid for the impoverished. Total spending on health care - public plus private - rose from 9.0% of GDP in 1980 to 17.9% in 2010. In July 2010, the president signed the DODD-FRANK Wall Street Reform and Consumer Protection Act, a law designed to promote financial stability by protecting consumers from financial abuses, ending taxpayer bailouts of financial firms, dealing with troubled banks that are "too big to fail," and improving accountability and transparency in the financial system - in particular, by requiring certain financial derivatives to be traded in markets that are subject to government regulation and oversight. Long-term problems include inadequate investment in deteriorating infrastructure, rapidly rising medical and pension costs of an aging population, sizable current account and budget deficits - including significant budget shortages for state governments - energy shortages, and stagnation of wages for lower-income families.
|
Source
: CIA |
FEDERAL SIGNAL CORPORATION
Address: 1415 West 22nd Street, Ste 1100, Oak Brook, IL 60523 - USA
Telephone: +1 630-954-2000
Fax: +1 630-954-2030
Website: www.federalsignal.com
Corporate ID#: 0701203
State: Delaware
Judicial form: Public Company (NYSE = FSS)
Date incorporated: 01-31-1969
Date founded: 1901
Stock: 62,293,684 shares outstanding at October 13, 2012
Value: USD
1= par value
Name of
manager: Dennis J. MARTIN
Business:
Federal Signal Corporation, together with
its subsidiaries, designs and manufactures a suite of products and integrated
solutions in the United States, Europe, and Canada.
The company’s Safety and Security Systems
Group segment provides systems and products that law enforcement, fire rescue
and emergency medical services, campuses, military facilities, and industrial
sites use to protect people and property. This segment offers systems for
campus and community alerting, emergency vehicles, public safety interoperable
communications, industrial communications, and command and municipal networked
security; and lightbars and sirens, public warning sirens, and public safety
software.
Its Environmental Solutions Group segment
provides street sweeper and vacuum trucks, and waterblasting equipment for
municipal and industrial customers; and products for the markets of
hydro-excavation, glycol recovery, and surface cleaning for utility and
industrial customers.
The company’s Fire Rescue Group segment
offers vehicle-mounted aerial platforms for fire fighting, rescue, electric
utility, and industrial uses; and parts, service, and training. This segment
serves fire departments, industrial fire services, electric utilities, and
maintenance rental companies.
The company was founded in 1901 and is
headquartered in Oak Brook, Illinois.
Suppliers include:
SUNYOUNG ELECTRICAL APPARATUS LTD.
EASTERN SHUANGHUA ROAD XUGONG QIAO ROAD HUAQIAO TOWN CHINA
FEDERAL SIGNAL VAMA, S.A.
DR.FERRAN, 7 08339 VILASSAR DE DALT(BARCELONA) SPAIN
EIN: 36-1063330
Staff: 2919
Operations & branches:
At the headquarters, we find the corporate office.
The Company maintains several branches in the U.S. including the one
located:
2645 Federal Signal Drive
University Park, IL 60484
Shareholders:
The Company is listed with the NYSE under
symbol FSS.
As of 12-31-2012, 79% of the stock was held
by institutional and mutual fund owners, including:
|
HEARTLAND
ADVISORS INC. |
14.15% |
|
HEARTLAND VALUE
PLUS FUND |
9.77% |
|
FRANKLIN
RESOURCES, INC |
7.61% |
|
DIMENSIONAL FUND
ADVISORS LP |
5.92% |
|
VANGUARD GROUP,
INC. (THE) |
5.68% |
Management:
Dennis J. MARTIN is the President and CEO
Mr. Dennis J. Martin has been the Chief
Executive Officer and President of Federal Signal Corp. since November 1, 2010.
Mr. Martin has been an Independent Business Consultant since 2005. He served as
the Chairman and Chief Executive Officer and President of General Binding
Corporation from May 8, 2001 to 2005. He served as Head of Commercial and
Consumer Group of General Binding Corporation from October 14, 2004 to 2005 and
served as an Executive Vice President from 1996 to 2001. He served as President
of the Oxo Division, President of Miller Group from 1994 to 2001, Vice
President and General Manager of ITW Buildex, President, ITW Hobart Brothers
from 1996 to 2001 and Vice President-Sales of ITW Ramset- Redhead. He worked at
Illinois Tool Works from 1991 to 2001. Mr. Martin served as Chief Executive
Officer of the Welding Products Group and served as an Executive Vice President
of Illinois Tool Works Inc. for more than five years. From 1976 to 1991, he
worked for Ingersoll-Rand Company, where he served as National Sales Manager of
the Power Tool Material Handling Group, Regional Manager of the Air Compressor
Group, and as a Sales Engineer for the Air Power Division. He serves as the
Chairman of Gbc Canada Inc. He has been a Director of HNI Corp. (formerly HON
Industries Inc.) since 2000. He has been an Independent Director of Coleman
Cable Inc. since February 2008. He has been an Independent Director of Federal
Signal Corp. and Federal Signal Technologies, LLC. since March 2008.
He served as a Director of General Binding
Corporation from 2001 to 2005.
He served as a Director of AO Smith Corp.
from January 15, 2004 to December 5, 2005. Mr. Martin holds a Bachelor of
Science degree in Industrial Engineering and Management from the University of New
Haven (Conn.) in 1980.
Braden WEVERLEY is the interim CFO.
Subsidiaries
And partnership:
|
NAME OF SUBSIDIARY |
|
JURISDICTION OF INCORPORATION |
|
Bronto Skylift Oy Ab |
|
Finland |
|
|
|
|
|
Bronto Skylift, Inc. |
|
Delaware |
|
|
|
|
|
Diamond Consulting Services Limited |
|
United Kingdom |
|
|
|
|
|
Elgin Sweeper Company |
|
Delaware |
|
|
|
|
|
Federal APD Incorporated |
|
Michigan |
|
|
|
|
|
Federal APD do Brasil Participacoes Ltda |
|
Brazil |
|
|
|
|
|
Federal Signal Asia Holdings Limited |
|
Hong Kong |
|
|
|
|
|
Federal Signal Credit Corporation |
|
Delaware |
|
|
|
|
|
Federal Signal Environmental Products
China (HK) Limited |
|
Hong Kong |
|
|
|
|
|
Federal Signal of Europe B.V. |
|
Netherlands |
|
|
|
|
|
Federal Signal of Europe B.V. Y CIA, S.C. |
|
Spain |
|
|
|
|
|
Federal Signal Safety Products (Shanghai)
Co. Ltd. |
|
China |
|
|
|
|
|
Federal Signal Technologies, LLC |
|
Delaware |
|
|
|
|
|
Federal Signal UK Holdings Limited |
|
United Kingdom |
|
|
|
|
|
Federal Signal VAMA, S.A. |
|
Spain |
|
|
|
|
|
FS Depot, Inc. |
|
Wisconsin |
|
|
|
|
|
FS Lighting, Inc. |
|
New York |
|
|
|
|
|
FS Lighting, LLP |
|
Texas |
|
|
|
|
|
Guzzler Manufacturing, Inc. |
|
Alabama |
|
|
|
|
|
IEES B.V. |
|
Netherlands |
|
|
|
|
|
Jetstream of Houston, Inc. |
|
Delaware |
|
|
|
|
|
Jetstream of Houston, LLP |
|
Texas |
|
|
|
|
|
PIPS Technology Inc. |
|
Tennessee |
|
|
|
|
|
PIPS Technology Limited |
|
United Kingdom |
|
|
|
|
|
Federal Signal Technologies (Hong Kong)
Limited |
|
Hong Kong |
|
|
|
|
|
Sirit Corp. |
|
Texas |
|
|
|
|
|
Sirit, Inc. |
|
ON, Canada |
|
|
|
|
|
Vactor Manufacturing, Inc. |
|
Illinois |
|
|
|
|
|
VESystems, LLC |
|
Delaware |
|
|
|
|
|
Victor Industrial Equipment (PTY) Limited |
|
South Africa |
|
|
|
|
|
Victor Products Holdings Ltd. |
|
United Kingdom |
|
|
|
|
|
Victor Products Ltd. |
|
United Kingdom |
|
|
|
|
|
Victor Products USA, Incorporated |
|
Delaware |
On November 9, 2012, Federal Signal Corp.
reported unaudited consolidated
earnings results for the third quarter and
nine months ended September 30, 2012.
For the quarter, the company reported net sales of $185.0 million against
$167.8 million for the same period in the last year. Operating income was $12.4
million against $8.5 million for the same period in the last year. Income
before income taxes was $5.4 million against $3.5 million for the same period
in the last year. Income from continuing operations was $4.4 million or $0.07
per basic and diluted share against $3.3 million or $0.05 per basic and diluted
share for the same period in the last year.
Net loss was $14.7 million or $0.24 per
basic and diluted share against net income of $2.4 million or $0.04 per basic
and diluted share for the same period in the last year. Net sales increased
$17.2 million or 10% and
$91.8 million or 19% for the three and nine
months ended September 30, 2012, respectively, compared to the respective
prior-year periods, primarily as a result of increased shipments across most
segments, favorable product mix and minor price increases, partially offset by
lower export sales to certain Asian customers and unfavorable currency impacts.
Operating income increased $3.9 million or
46% and $16.8 million or 77% in the three and nine months ended September 30,
2012, respectively, compared to the respective prior-year periods. The increase
in operating income was primarily a result of higher sales volume and an
overall favorable change in product mix. Net capital expenditures were $8
million due the third quarter, representing a $1.5 million reduction from last
year.
For the nine months, the company reported
net sales of $585.5 million against $493.7 million for the same period in the
last year. Operating income was $38.5 million against $21.7 million for the
same period in the last year. Income before income taxes was $19.1 million
against $9.4 million for the same period in the last year. Income from
continuing operations was $17.2 million or $0.28 per basic and diluted share
against $6.6 million or $0.11 per basic and diluted share for the same period
in the last year.
Net loss was $32.2 million or $0.51 per
basic and diluted share against net income of $1.0 million or $0.02 per basic
and diluted share for the same period in the last year. Net cash used for
operating activities was $2.3 million against net cash provided by operating
activities of $0.8 million for the same period in the last year.
Purchases of properties and equipment were
$9.2 million against $10.6 million for the same period in the last year. Net
debt declined by $64 million since the end of the year. The company announced
that as it fulfill orders in the backlog and reduce inventory through the end
of the year, it expects to continue generating positive cash flow from
continuing operations.
On attachment:
- 10K 2011
- 3rd 10Q 2012
Banks: JPMorgan Chase Bank
Wells Fargo Bank
...
Legal filings & complaints:
As of today date, there are several filing
pending with various Courts, involving the Company as plaintiff or defendant.
Secured debts summary (UCC): None (in Illinois)
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+'.
On Monday, we will issue separate releases concerning
affected ratings in the funds, government-related entities, financial
institutions, insurance, public finance, and structured finance sectors.
FOREIGN EXCHANGE RATES
|
Currency |
Unit
|
Indian Rupees |
|
US Dollar |
1 |
Rs.53.98 |
|
|
1 |
Rs.83.72 |
|
Euro |
1 |
Rs.72.08 |
INFORMATION DETAILS
|
Report Prepared
by : |
PDT |
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%)
This report is issued at your request without any
risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL)
or its officials.