|
Report Date : |
15.01.2013 |
IDENTIFICATION DETAILS
|
Name : |
PRIMUS TELECOMMUNICATIONS GROUP, INCORPORATED |
|
|
|
|
Registered Office : |
7901 Jones Branch Drive, Ste 900, Mc Lean, VA 22102 |
|
|
|
|
Country : |
United States |
|
|
|
|
Financials (as on) : |
31.12.2011 (Consolidated) |
|
|
|
|
Date of Incorporation : |
04.02.1994 |
|
|
|
|
Legal Form : |
Public Company (NYSE = PTGI) |
|
|
|
|
Line of Business : |
The company offers data center services consisting of managed hosting, co-location, and e-commerce applications; Internet services, including residential and business broadband services; small- and medium-sized enterprise Voice over Internet Protocol (VoIP) services; and local landline services. |
|
|
|
|
No. of Employees : |
1,421 |
RATING & COMMENTS
|
MIRA’s Rating : |
B |
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
26-40 |
B |
Capability to overcome financial difficulties seems comparatively
below average. |
Small |
|
Status : |
Moderate |
|
Payment Behaviour : |
Slow |
|
Litigation : |
Exists |
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 (31.03.2011) |
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
Company name: PRIMUS TELECOMMUNICATIONS GROUP,
INCORPORATED
Address: 7901 Jones Branch Drive,
Ste 900, Mc Lean, VA 22102 - USA
Telephone: +1
703-902-2800
Fax: +1 703-902-2877
Corporate ID#: 2375835
State: Delaware
Judicial form: Public Company (NYSE = PTGI)
Date incorporated: February
4, 1994
Stock: 13,899,543
shares issued and outstanding (as of 10-31-2012)
Value: USD
0.001= par value
Name of manager: Andrew
DAY
Business:
Primus Telecommunications Group, Incorporated provides integrated
facilities-based communications services primarily in Australia, Canada, and
the United States.
The company offers data center services consisting of managed hosting,
co-location, and e-commerce applications; Internet services, including
residential and business broadband services; small- and medium-sized enterprise
Voice over Internet Protocol (VoIP) services; and local landline services. It
also provides traditional services, such as domestic and international
long-distance voice services; local landline services, including off-net
services; prepaid phone card services; residential VoIP services; wireless
mobile virtual network operator services; and dial-up Internet services; and
international telecommunications carrier services.
In addition, the company offers asymmetric and symmetric IP services,
integrated services digital network and telephone line services, frame relay
and asynchronous transfer mode, and IP virtual private networking services.
It serves small- and medium-sized enterprises, multinational
corporations, residential customers, and other telecommunication carriers and
resellers.
The company offers its services through data centers, carrier-grade
international gateway and domestic switching systems, Internet routers and
media gateways, a network of interconnection points, fiber optic transmission
line systems, and VOIP network.
Primus Telecommunications Group, Incorporated was founded in 1994 and is
headquartered in McLean, Virginia.
EIN: 54-1708481
Staff: 1,421
Operations & branches:
At the headquarters, we
find the corporate office.
Shareholders:
The Company is listed with
the NYSE under symbol PTGI.
48% of the stock is held by
institutional and mutual fund owners, including:
|
ARCHER CAPITAL
MANAGEMENT, L.P. |
7.73% |
|
RAPTOR CAPITAL
MANAGEMENT LP |
6.18% |
|
MORGENS
WATERFALL VINTIADIS & CO. INC. |
4.03% |
|
CHOU ASSOCIATES
MANAGEMENT INC. |
3.24% |
|
SANDLER CAPITAL
MANAGEMENT |
2.80% |
|
BLACKROCK FUND
ADVISORS |
2.11% |
Management:
Andrew DAY, President and CEO.
Andrew Day was named President and Chief Executive Officer of PTGi in
December 2012. Mr. Day had been serving as PTGi's North America CEO for the
past year. Prior to holding this position, since June 2009, he was the Chief
Operating Officer/CEO of PTGi's Canadian business unit. Mr. Day joined PTGi in
1999 and has held various senior positions within PTGi, including managing the
marketing, sales and operations departments. Prior to joining PTGi, he held a
range of marketing, business development and finance positions with major
international companies including AT&T, Gillette and Xerox.
Mr. Day has an Honours Bachelor of Commerce from McMaster University,
and is a Certified Management Accountant.
Peter D. AQUINO is Executive Chairman
Peter D. Aquino, was named Executive Chairman of the Board of Directors
in December 2012 after serving as Chairman, President and Chief Executive
Officer of Primus since October 2010. Mr. Aquino has devoted his career to
building and restructuring telecommunications services providers, most recently
serving as President and Chief Executive Officer of RCN Corporation, a provider
of digital video, high-speed data, voice, and high-capacity transport to
residential and small, medium and large enterprise and carrier customers from
December 2004 to August 2010, leading RCN from emergence of bankruptcy through
its sale. Prior to joining RCN, Mr. Aquino was Senior Managing Director of
Communications Technology Advisors LLC, focused on restructuring telecom and
media companies from 2001 to 2004. Prior to this, he was the Chief Operating
Officer of one of the first Triple Play companies in Latin America --
designing, building, and operating an integrated cable TV and competitive local
exchange carrier throughout nine major cities in Venezuela from 1995 and 2000.
Mr. Aquino began his career at Bell Atlantic (now Verizon) in 1983, holding
positions in finance, marketing, regulatory and corporate development. He
joined Primus' board in July 2009 and serves on the boards of TiVo Inc. and the
United Way of America. He is a graduate of Montclair State College in NJ, and
holds an MBA from George Washington University in Washington, DC.
James C. KEELEY is the CFO.
Subsidiaries
And partnership:
|
Primus Telecommunications, Inc. |
|
(Delaware) |
|
Primus Telecommunications IHC, Inc. |
|
(Delaware) |
|
STSJ Overseas Telephone Company, Inc. |
|
(Puerto Rico) |
|
St. Thomas & San Juan Telephone Company, Inc. |
|
(US Virgin Islands) |
|
Primus Telecommunications Canada Inc. |
|
(Ontario, Canada) |
|
Telesonic Communications, Inc. |
|
(Ontario, Canada) |
|
Primus Telecom Holdings Pty. Ltd. |
|
(Australia) |
|
Primus Network (Australia) Pty. Ltd. |
|
(Australia) |
|
Primus Telecom Pty. Ltd |
|
(Australia) |
|
Primus Telecommunications Pty. Ltd. |
|
(Australia) |
|
Primus Telecommunications (Australia) Pty. Ltd. |
|
(Australia) |
|
0014 Pty. Ltd. |
|
(Australia) |
|
Hotkey Internet Service Pty. Ltd. |
|
(Australia) |
|
Primus Online Pty. Ltd. |
|
(Australia) |
|
Primus Telecommunications Ltd. |
|
(United Kingdom) |
|
Global Access Pty., Ltd. |
|
(South Africa) |
|
Lingo, Inc. |
|
(Delaware) |
|
Globility Communications Corporation |
|
(Ontario, Canada) |
|
Arbinet Corporation |
|
(Delaware) |
|
Arbinet Communications, Inc. |
|
(Delaware) |
|
Arbinet-thexchange LTD |
|
(United Kingdom) |
|
Arbinet-thexchange HK LTD |
|
(Hong Kong) |
|
Arbinet Carrier Services, Inc. |
|
(Delaware) |
The Company reported
financials for 3rd quarter 2012.
Net revenue was $63.9 million, a decrease of 14.0% from $74.3 million in
the third quarter of 2011. The impact of foreign currency was a decrease of
$1.0 million. On a constant currency basis, net revenue decreased 12.6%.
The primary driver of the decrease in revenue is a decline in local and
long distance services.
Net revenue less cost of revenue was $32.4 million, or 50.7% of net
revenue, compared to $37.5 million, or 50.5% of net revenue, in the third
quarter of 2011. The impact of foreign currency translation was a decrease of
$0.5 million. On a constant currency basis, net revenue less cost of revenue
decreased primarily due to the decrease in net revenue.
Selling, general and administrative ("SG&A") expense was
$23.3 million, or
36.4% of net revenue, compared to $27.2 million, or 36.7% of net revenue
in
the third quarter of 2011. Excluding $1.0 million of severance and other
non-recurring costs, SG&A was $22.3 million, or 34.8% of revenue. The
leveraging of SG&A is primarily due to management's focus on reducing
overhead to an optimum level to support continuing PTGi operations.
Income from operations was $1.5 million, or 2.3% of revenue, compared to
$1.6 million, or 2.1% of revenue in the third quarter of 2011.
Adjusted EBITDA was $10.1 million, or 15.8% of net revenue, compared to
$11.0 million, or 14.8% of net revenue, in the third quarter of 2011. Excluding
severance and other non-recurring costs, Normalized Adjusted EBITDA was $11.1
million, or 17.4% of net revenue, compared to $10.3 million, or 13.8% of net
revenue in the third quarter of 2011. The year-over-year impact of foreign
exchange translation was a decrease of $0.2 million. On a constant currency
basis, the increase in Normalized Adjusted EBITDA was primarily attributable to
decreases in SG&A expenses and greater contribution from growth service
offerings.
Net loss was $25.0 million, or $(1.81) per basic and diluted common
share, compared to $10.0 million, or $(0.73) per basic and diluted common
share, in the third quarter 2011. Third quarter 2012 and 2011 results included
losses from the early extinguishment or restructuring of debt of $21.1 million
and $6.9 million, respectively. The number of shares outstanding used to
calculate basic and diluted earnings per common share in the third quarter of
2012 was 13.9 million, compared to 13.7 million for basic and diluted earnings
per
common share in the third quarter of 2011.
On November 14, 2012, Primus Telecommunications Group Inc. announced
that its Board of Directors has approved a special cash dividend of $2.50 per
share on all issued and outstanding common stock. The special cash dividend was
paid on December 11, 2012 to holders of record of common stock as of November
27, 2012.
On December 11, 2012, Primus Telecommunications Group Inc. announced
that its Board of Directors has approved a special cash dividend of $0.50 per
share on all issued and outstanding PTGi common stock. The special cash
dividend was paid on December 28, 2012 to holders of record of PTGi common
stock as of December 21, 2012. The ex-dividend date for this special dividend
was December 19, 2012.
On attachment:
- 10K 2011
- 3rd 10Q 2012
Banks: Bank of New York Mellon
US Bank
Legal filings & complaints:
State: Texas
Case number: 6:11-cv-00231-LED
Plaintiff: Klausner Technologies, Inc.
Defendant: Primus Telecommunications Group,
Inc. et al
Leonard Davis, presiding
Date filed: 05/10/2011
Date of last filing: 01/03/2013
Cause: Patent infringement
Several other complaints are pending.
Secured debts summary (UCC):
Numerous
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.54.63 |
|
|
1 |
Rs.88.17 |
|
Euro |
1 |
Rs.73.13 |
INFORMATION DETAILS
|
Report
Prepared by : |
PRL |
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.