|
Report Date : |
06.03.2013 |
IDENTIFICATION DETAILS
|
Name : |
PIER 1 IMPORTS, INC. |
|
|
|
|
Registered Office : |
100 Pier 1 Place, Fort Worth, TX 76102 |
|
|
|
|
Country : |
United States |
|
|
|
|
Date of Incorporation : |
30.04.1986 |
|
|
|
|
Legal Form : |
Public Company (NYSE = PIR) |
|
|
|
|
Line of Business : |
Operates as a specialty retailer of imported decorative home furnishings, gifts, and related items. |
|
|
|
|
No. of Employees : |
Approximately 16,200 (Group) |
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 : |
Good |
|
Payment Behaviour : |
Regular |
|
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 (31.03.2011) |
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
PIER 1 IMPORTS
913 Old Philadelphia Road,
Aberdeen, MD 21001 – USA
This is a distribution center of:
Company name: PIER 1 IMPORTS, INC.
Address: 100 Pier 1 Place, Fort
Worth, TX 76102 - USA
Telephone: +1
817-252-8000
Fax: +1 817-252-8174
Website: www.pier1.com
Corporate ID#: 2089773
State: Delaware
The Company was also incorporated in Texas on
06-18-1987
ID# 7322506
Judicial form: Public Company (NYSE = PIR)
Date founded: 04-30-1986
Stock: 105,819,676 shares
issued and outstanding
(As of December 26, 2012)
Value: USD
0.001= par value
Name of manager: Alexander W. SMITH
Business:
Pier 1 Imports, Inc., together with its subsidiaries, operates as a
specialty retailer of imported decorative home furnishings, gifts, and related
items. Its stores offer furniture, decorative home furnishings, dining and
kitchen goods, epicurean products, bath and bedding accessories, candles, and
other specialty items for the home.
The company’s decorative accessories include wood accessories, lamps,
vases, dried and artificial flowers, baskets, ceramics, dinnerware, bath and
fragrance products, bedding, and seasonal and gift items.
Its furniture products comprise furniture and furniture cushions to be
used on patios, and in living, dining, kitchen, bedroom, and sunrooms, as well
as wall decorations and mirrors.
As of February 25, 2012, it operated 971 stores in the United States and
81 stores in Canada under the Pier 1 Imports brand name.
The company also supplies merchandise and licenses the Pier 1 Imports
name to sell its merchandise primarily in a store within a store format in
Mexico and El Salvador.
Pier 1 Imports, Inc. was founded in 1970 and is headquartered in Fort
Worth, Texas.
Staff:
The group employs
approximately 16,200 associates in the United States and Canada, of which
approximately 3,300 were full-time employees and 12,900 were part-time
employees.
Operations & branches:
At the headquarters, we
find the corporate headquarters, warehouse and office of the group.
Shareholders:
The Company is listed with the NYSE under symbol PIR
As of 12-31-2012, 84% of the stock was held by institutional and mutual
fund owners, including:
|
Columbia Wanger
Asset Management, L.P. |
8.82% |
|
Columbia Acorn
Fund |
6.24% |
|
State Street
Corporation |
5.17% |
|
Vanguard Group,
Inc. (The) |
5.10% |
|
Jennison
Associates LLC |
3.61% |
Management:
Alexander W. SMITH is the President, Director and CEO.
Born in 1953
Alexander W. Smith, Alex has been Chief Executive Officer and President
of Pier 1 Imports Inc. since February 19, 2007.
Mr. Smith has more than 30 years experience in the retail industry.
He has significant international management experience in operations and
merchandising in Asia and Europe. He spent 12 years with the TJX Companies,
Inc. Mr. Smith served as Senior Executive Vice President and Group President of
The Tjx Companies, Inc. since March 29, 2004, Executive Vice President and
Group Executive of International from 2001 to March 29, 2004. He was
responsible for The Marmaxx Group, The Tjx Companies, Inc.'s HomeGoods
division, and the California Buying Office.
He also oversaw the European Buying Offices. He served as Managing
Director of T.K. Maxx from 1995 to 2001, Lane Crawford Limited from 1994 to
1995, Owen Owen plc Singapore from 1990 to 1993 and Merchandise Director from
1987 to 1990.
He served as Chairman of the Board of T.J. Maxx, Inc.
Mr. Smith has been a Director of Papa John's International Inc. since
June 25, 2007 and Pier 1 Imports Inc. since February 19, 2007.
He serves as Director of T.J. Maxx, Inc.
Mr. Smith holds a BSc from the University of East Anglia in the United
Kingdom.
Charles H. TURNER is Director and CFO.
Mr. Turner served as Senior Vice President of Finance of Pier 1 Imports
from August 1999 to April 2002. He served as Senior Vice President of Stores of
Pier 1 Imports Inc/de from August 1994 to August 1999, and served as Controller
and Principal Accounting Officer of Pier 1 Imports from January 1992 to August
1994. He has been Director of the Elder Beerman Stores Corp. since 2000.
Subsidiaries &
Partnership:
Pier 1 Assets, Inc., a Delaware corporation
Pier 1 Licensing, Inc., a
Delaware corporation
Pier 1 Imports (U.S.), Inc.,
a Delaware corporation
Pier 1 Funding, LLC, a
Delaware limited liability company
Pier 1 Value Services, LLC, a Virginia
limited liability company
Pier Lease, Inc., a
Delaware corporation
Pier-SNG, Inc., a
Delaware corporation
Pier Group, Inc., a
Delaware corporation
PIR Trading, Inc., a
Delaware corporation
Pier International
Limited, a Hong Kong private limited company
Pier 1 Beverages, LLC,
a Texas limited liability company
Pier Alliance Ltd., a
Bermuda company
Pier 1 Holdings, Inc., a Delaware
corporation
Pier 1 Services
Company, a Delaware statutory trust
On attachment:
- 10K 2011-2012 (fiscal
year ending February 2012)
- 3rd 10Q 2012
December 13, 2012
Pier 1 Imports, Inc. reported unaudited consolidated financial results
for the third quarter and nine months ended November 24, 2012. For the quarter,
the company reported net income of $23.7 million, or $0.22 per share. Adjusted
net income on a non-GAAP basis, which excludes the estimated impact of Hurricane
Sandy and utilizes an estimated 35.6% annual effective tax rate for fiscal
2013, was $27.1 million or $0.25 per share. For the third quarter ended
November 26, 2011, the company reported net income of $23.0 million or $0.21
per share. Total sales for the third quarter of fiscal 2013 were $424.5
million, an increase of 10.9% versus $382.7 million in the year-ago quarter.
Comparable store sales increased 7.9% during the third quarter on top of last
year's 7.0% gain. Strong comparable store sales results for the period were
primarily attributable to increases in store traffic and higher average ticket.
Operating income for the third quarter increased 18% to $38.8 million, or 9.1%
of sales, compared to last year's third quarter operating income of $32.9
million, or 8.6% of sales. Income before income taxes (GAAP) was $38.5 million
against $35.37 million for the same period a year ago. For the nine months, the
company reported net income of $67.7 million, or $0.62 per share, which
included the tax benefit and reduced accrued interest resulting from the
reversal of a portion of the company's reserve for uncertain income tax
positions in the second quarter of fiscal 2013. For the first nine months of
fiscal 2013, adjusted net income on a non-GAAP basis was $65.7 million or $0.60
per share, and excludes the estimated impact of Hurricane Sandy, utilizes an
estimated annual effective tax rate of 35.6%, and excludes the reversal of
accrued interest. The company reported net income of $53.7 million, or $0.47
per share, for the same period last year. Total sales for the first nine months
increased 9.1% to $1.153 billion from $1.057 billion in the year-ago period.
Comparable store sales for the first nine months increased 7.3% versus a
comparable store sales increase of 9.2% in the year-ago period. Operating
income for the first nine months of fiscal 2013 increased 29% to $98.5 million
or 8.5% of sales compared to $76.5 million or 7.2% of sales for the same period
in fiscal 2012. Income before income taxes (GAAP) was $101.3 million against
$82.65 million for the same period a year ago. Net cash used in operating
activities was $20.23 million against net cash provided by operating activities
of $11.94 million for the same period a year ago. Capital expenditures were
$57.74 million against $40.36 million for the same period a year ago. The
company's fiscal 2013 fourth quarter and fiscal year will include 14 weeks and
53 weeks, respectively, of operating results. The company provided the
following financial guidance for the fiscal 2013 fourth quarter on a 13-week
basis: Comparable store sales growth in the mid single-digit range; earnings
per share (GAAP) in the range of $0.55 to $0.59, utilizing an effective tax
rate of 38.5%; and earnings per share (non-GAAP) in the range of $0.57 to
$0.61, utilizing an annual effective tax rate of 35.6%. The company provided
the following updated financial guidance for full fiscal year 2013 on a 52-week
basis: Comparable store sales growth in the mid single-digit range; earnings
per share, on both a GAAP and non-GAAP basis, in the range of $1.17 to $1.21;
and capital expenditures of approximately $70 to $75 million. The 14 and 53
week is expected to contribute approximately $25 million to total sales and
approximately $0.02 to earnings per share. The company announced that its Board
of Directors declared a $0.05 per share quarterly cash dividend on the
company's outstanding shares of common stock, reflecting a 25% increase from
the previous quarterly cash dividend. The $0.05 quarterly cash dividend will be
paid on January 30, 2013 to shareholders of record on January 16, 2013.
January 3, 2013
Pier 1 Imports, Inc. reported sales results for the month ended December
29, 2012. For the month, the company that December comparable store sales
increased 8.2% for the five-week period ended December 29, 2012 compared to a
reported comparable store sales increase of 11.3% for the five-week period
ended December 31, 2011, representing a three-year cumulative comparable store
sales increase of 29.8%.
Banks: Chase
Legal filings & complaints:
As of today date, there is no legal filing pending with the District
Courts.
Secured debts summary (UCC):
None
The trend of payments (for domestic) appears as follow:
|
Monthly Payment Trends - Recent Activity |
|
Payments are currently made with an average of 5 days beyond terms.
The Company is in good
standing.
This means that all local
and federal taxes were paid on due date.
The risk is low.
The Company is developing a
strong business.
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 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.54.65 |
|
|
1 |
Rs.82.66 |
|
Euro |
1 |
Rs.71.21 |
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.