|
Report Date : |
29.01.2013 |
IDENTIFICATION DETAILS
|
Name : |
JOHN BEAN TECHNOLOGIES CORPORATION |
|
|
|
|
Registered Office : |
70 W. Madison Street, Ste 4400, Chicago, IL 60602 |
|
|
|
|
Country : |
United States |
|
|
|
|
Date of Incorporation : |
12.05.1994 |
|
|
|
|
Legal Form : |
Public Company |
|
|
|
|
Line of Business : |
Subject provides technology solutions for the food processing and air
transportation industries. |
|
|
|
|
No. of Employees : |
3,300 |
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 |
Company name: JOHN BEAN TECHNOLOGIES CORPORATION
Address: 70 W. Madison Street,
Ste 4400, Chicago, IL 60602 - USA
Telephone: +1
312-861-5900
Fax: +1 312-861-5897
Website: www.jbtcorporation.com
Corporate ID#: 2402299
State: Delaware
Judicial form: Public Company (NYSE = JBT)
Date incorporated: May 12,
1994
Stock: 140,000,000
shares
28,925,567 shares issued
and outstanding as of Nov. 1, 2012
Value: USD
0.01= par value
Name of manager: Charles
H. CANNON Jr.
Business:
John Bean Technologies Corporation provides technology solutions for the
food processing and air transportation industries.
The company operates in two segments, JBT FoodTech and JBT AeroTech.
The JBT FoodTech segment provides industrial food processing solutions
and services used in the food processing industry. Its product offerings include
freezer solutions for the freezing and chilling of meat, seafood, poultry,
ready-to-eat meals, fruits, vegetables, and dairy and bakery products; protein
processing solutions that portion, coat, and cook poultry, meat, seafood,
vegetables, and bakery products; in container processing solutions for fruits,
vegetables, soups, sauces, dairy, and pet food products, as well as
ready-to-eat meals in various packages; and fruit and juice processing
solutions that extract, concentrate, and aseptically process citrus, tomato,
and other fruits and juices. This segment markets its solutions and services to
multi-national and regional industrial food processing companies.
The JBT AeroTech segment offers ground support equipment for cargo
loading, aircraft deicing, and aircraft towing; gate equipment for passenger
boarding, on the ground aircraft power, and cooling; airport services for
maintenance of airport equipment, systems, and facilities; military equipment
for cargo loading, aircraft towing, and on the ground aircraft cooling; and
automatic guided vehicles for material handling in the automotive, printing,
food and beverage, manufacturing, warehouse, and hospital industries. This
segment markets its solutions and services to airport authorities, passenger airlines,
airfreight and ground handling companies, and military forces.
The company sells and markets its products and services through direct
sales force, independent distributors, and sales representatives in the United
States and internationally.
John Bean Technologies Corporation is headquartered in Chicago,
Illinois.
The Company imports mainly from Asia and exports to South and Central
America.
EIN: 91-1650317
Staff: 3,300
Operations & branches:
At the headquarters, we
find the corporate office, on lease.
The Company maintains
several branches in the U.S. including a factory located:
7300 Presidents Drive
Orlando, FL 32809
Ph: 407-851-3377
Fx: 407-850-2839
Shareholders:
The Company is listed with the NYSE under symbol JBT.
93% of the stock is held by institutional and mutual fund owners,
including:
|
SHAPIRO CAPITAL MANAGEMENT COMPANY, INC. |
14.21% |
|
KEELEY ASSET MANAGEMENT CORP. |
7.33% |
|
VANGUARD GROUP, INC. (THE) |
5.51% |
|
PRICE (T.ROWE) ASSOCIATES INC |
4.75% |
|
BLACKROCK FUND ADVISORS |
4.56% |
|
WELLINGTON MANAGEMENT COMPANY, LLP |
4.51% |
Management:
Charles H. CANNON Jr. is the President, Director and CEO
Mr. Charles H. Cannon, Charlie, Jr. has been the Chairman, Chief Executive
Officer and President of John Bean Technologies Corporation (formerly Fmc
Foodtech Inc.) since April 25, 2008. Mr. Cannon served as Group Manager FMC
Airport Systems. He served as Vice President Group Manager of John Bean
Technologies Corporation since 1994. He served as the Vice President and
General Manager of FMC Corporation and since October 1994 and Transportation
Systems Group of FMC Corporation ... since 1998. Mr. Cannon served as the
Senior Vice president of FoodTech and Airport Systems of FMC Technologies Inc.,
since March 17, 2004. He served as a Senior Vice President of FMC Technologies,
Inc., from March 2004 to July, 2008. He served as the Vice President of
FoodTech and Airport Systems businesses of FMC Technologies, Inc. from 2001 to
March 17, 2004 and served as its General Manager since 2001.
He joined FMC Technologies' predecessor organization in 1982 and served
as a Senior Business Planner. Mr. Cannon subsequently served in a number of
management capacities in FMC Technologies' food processing equipment
businesses. He served as Vice President of Standex International Corp. since
1994. He served as Vice President of FMC Technologies, Inc., from February 2001
to February 2004. Mr. Cannon served in the U.S. Navy as a Nuclear Attack Submarine
Officer and as an aide to the Deputy Chief of Naval Operations from 1975 to
1980, he moved to Minneapolis to become materials manager for its Armament
Systems Division. Mr. Cannon served as the Director of Business Development for
Food Machinery Group's Food Processing Systems Division since 1986. He served
as General Manager of FMC's Food Machinery Group since September 1994. He has
more than 20 Years of Experience. Since 1987, Mr. Cannon served as Sales and
Marketing Manager of the FMC's Citrus Machinery and Services Division and
served as General Manager of the division since 1989. From April 1992 to
September 1994, he served as General Manager of Food Processing Systems
Division. He has been an Independent Director of Standex International Corp., since
October 26, 2004. He has been a Director of John Bean Technologies Corporation
since April 25, 2008. He serves as a Director of Standex Engraving L.L.C. He
serves as a Director of National Food Processors Association and the European
Food Processing Machinery Association Food Processing Technology Veteran.
Mr. Cannon holds a Bachelor of Science degree in Physics from the United
States Naval Academy and a Master of Business Administration degree from the
University of Chicago.
Vice Presidents include Torbjorn ARVIDSSON, Ronald MAMBU, and John LEE.
Ronald MAMBU is also the CFO.
James MARVIN is Secretary.
Subsidiaries
And partnership: Several
in the U.S. and worldwide.
Nov 5 12
John Bean Technologies Corporation reported unaudited consolidated
earnings results for the third quarter and nine months ended September 30,
2012.
For the quarter, the company reported income from continuing operations
before income taxes was $8.5 million against $12.8 million a year ago. Net
income was $6.1 million or $0.20 per basic and diluted share against $8.1
million or $0.27 per basic and diluted share a year ago. Income from continuing
operations was $6.2 million or $0.21 per basic and diluted share against $8.1
million or $0.28 per basic and diluted share a year ago. Operating income was
$10.3 million against $14.3 million a year ago. Capital expenditures for the
quarter totaled $6.2 million, and depreciation and amortization totaled $6.1
million. Cash generated by operating activities in the quarter was $20.4
million. Revenue was $205.3 million against $230.3 million a year ago.
For the nine months, the company reported income from continuing
operations before income taxes was $26.9 million against $36.1 million a year
ago.
Net income was $17.7 million or $0.60 per basic and diluted share
against $23.3 million or $0.79 per basic and diluted share a year ago. Income
from continuing operations was $18.1 million or $0.61 per basic and diluted
share against $23.4 million or $0.80 per basic and diluted share a year ago.
Operating income was $32.1 million against $41.0 million a year ago.
Cash provided by continuing operating activities was $68.6 million
against $44.2 million a year ago. Capital expenditures were $17.3 million against
$15.2 million a year ago. Revenue was $624.4 million against $684.3 million a
year ago. The company provided earnings guidance for the fourth quarter and
full year 2012. The company projects a record fourth quarter performance,
supported by a strong quarter-end backlog and continued savings from cost
reduction actions taken earlier in the year. However, a modest top-line
contraction is expected for the full-year 2012, primarily resulting from lower
than previously forecasted sales volume and shifts in delivery schedules to
2013 of certain large orders. As a result, the company has updated its guidance
range to $1.22 to $1.28 for 2012 diluted earnings per share from continuing
operations.
Dec 3 12
With effective on November 30, 2012 each of John Bean Technologies
Corporation, John Bean Technologies B.V. and John Bean Technologies AB entered
into a credit agreement with JPMorgan Chase Bank, N.A., as administrative
agent, and the other lenders and parties signatory thereto. The credit
agreement provides for a $300 million revolving credit facility, and the
commitments there under shall expire on November 30, 2017. In addition, John
Bean Technologies Corporation may cause the commitments to increase (by way of
additional revolving loan capacity or term loans) by up to an additional $150
million, subject to approval of the applicable lenders providing such
additional financing. Borrowings by the borrowers under the credit agreement
may be used for general corporate purposes, including working capital and permitted
acquisitions. Certain subsidiaries of John Bean Technologies Corporation have
agreed to be jointly and severally liable for the obligations of certain
borrowers under the credit agreement, and John Bean Technologies Corporation
has agreed to be liable for the obligations of the other borrowers under the
credit agreement.
On attachment:
- 10K 2011
- 3rd 10Q 2012
Banks: JPMorgan Chase Bank
Legal filings
& complaints:
State: Massachusetts
Case number: 1:12-cv-11808-RWZ
Plaintiff: Richard Kempton
Defendant: John Bean Technologies
Corporation et al
Rya W. Zobel, presiding
Date filed: 09/28/2012
Date of last filing: 01/02/2013
Secured debts summary (UCC):
None (in Illinois)
Haut du formulaire
Trade references:
Date reported: December 2012
High credit: USD 60,000+
Now owing: 0
Past due: 0
Last purchase: November 2012
Line of business: Office supply
Paying status: 3 days beyond terms
Date reported: December 2012
High credit: USD 5,000,000+
Now owing: 0
Past due: 0
Last purchase: November 2012
Line of business: Payroll
Paying status: As agreed
Date reported: December 2012
High credit: USD 18,000+
Now owing: 0
Past due: 0
Last purchase: November 2012
Line of business: Telecommunications
Paying status: 3 days beyond terms
Domestic credit history:
Domestic credit history
appears as follow:
|
Monthly Payment Trends - Recent Activity |
|
Date |
Up to 30 DBT |
31-60 DBT |
61-90 DBT |
>90 DBT |
||
|
08/12 |
$230,700 |
69% |
19% |
8% |
1% |
3% |
|
09/12 |
$247,200 |
78% |
18% |
2% |
0% |
2% |
|
10/12 |
$325,200 |
86% |
10% |
2% |
0% |
2% |
|
11/12 |
$343,000 |
86% |
10% |
3% |
0% |
1% |
|
12/12 |
$330,000 |
82% |
14% |
2% |
0% |
2% |
|
01/13 |
$215,400 |
75% |
21% |
2% |
0% |
2% |
National Credit Bureaus
gave a correct credit rating.
According to our credit analysts, during the last 6 months, payments
were made with an average of 5 days beyond terms.
International
credit history:
Payments of imports are currently made with an average of 2 to 5 days
beyond terms.
Other comments:
The Company maintains its
business.
The Company is in good
standing.
This means that all local
and federal taxes were paid on due date.
Last report was filed on
09-14-2012.
The risk is low.
Our opinion:
A business connection may
be conducted.
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 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.53.89 |
|
|
1 |
Rs.84.92 |
|
Euro |
1 |
Rs.72.51 |
INFORMATION DETAILS
|
Report Prepared
by : |
SDA |
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.