|
Report No. : |
351118 |
|
Report Date : |
30.11.2015 |
IDENTIFICATION DETAILS
|
Name : |
PPG INDUSTRIES, INC. |
|
|
|
|
Registered Office : |
One PPG Place, Pittsburgh, PA 15272 |
|
|
|
|
Country : |
United States |
|
|
|
|
Date of Incorporation : |
24.08.1883 |
|
|
|
|
Legal Form : |
Public Company |
|
|
|
|
Line of Business : |
|
|
|
|
|
Employees: |
44,400 |
RATING & COMMENTS
|
MIRA’s Rating : |
A |
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
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 |
|
Status : |
Good |
|
Payment Behaviour : |
Slow but correct |
|
Litigation : |
Clear |
NOTES :
Any query related to this report can be made
on e-mail : infodept@mirainform.com
while quoting report number, name and date.
ECGC Country Risk Classification List – March 31, 2015
|
Country Name |
Previous Rating (31.12.2014) |
Current Rating (31.03.2015) |
|
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 most technologically powerful economy in the world, with a per capita GDP of $54,800. US firms are at or near the forefront in technological advances, especially in computers, pharmaceuticals, and medical, aerospace, and military equipment; however, their advantage has narrowed since the end of World War II. Based on a comparison of GDP measured at Purchasing Power Parity conversion rates, the US economy in 2014, having stood as the largest in the world for more than a century, slipped into second place behind China, which has more than tripled the US growth rate for each year of the past four decades.
In the US, 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.
Long-term problems for the US include stagnation of wages for lower-income families, inadequate investment in deteriorating infrastructure, rapidly rising medical and pension costs of an aging population, energy shortages, and sizable current account and budget deficits.
The onrush of technology has been a driving factor in 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. But the globalization of trade, and especially the rise of low-wage producers such as China, has put additional downward pressure on wages and upward pressure on the return to capital. 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 and oil has a major impact on the overall health of the economy. Crude 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 climbed another 50% between 2006 and 2008, and bank foreclosures more than doubled in the same period. Besides dampening the housing market, soaring oil prices caused a drop in the value of the dollar and a deterioration in the US merchandise trade deficit, which peaked at $840 billion in 2008.
The sub-prime mortgage crisis, falling home prices, investment bank failures, tight credit, and the global economic downturn 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, the US Congress established a $700 billion Troubled Asset Relief Program (TARP) in October 2008. 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. In 2012, the federal government reduced the growth of spending and the deficit shrank to 7.6% of GDP.
Wars in Iraq and Afghanistan required major shifts in national resources from civilian to military purposes and contributed to the growth of the budget deficit and public debt. Through 2014, the direct costs of the wars totaled more than $1.5 trillion, according to US Government figures. US revenues from taxes and other sources are lower, as a percentage of GDP, than those of most other countries.
In March 2010, President OBAMA signed into law the Patient Protection and Affordable Care Act, a health insurance reform that was designed to 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.
In December 2012, the Federal Reserve Board (Fed) announced
plans to purchase $85 billion per month of mortgage-backed and Treasury
securities in an effort to hold down long-term interest rates, and to keep
short term rates near zero until unemployment dropped below 6.5% or inflation
rose above 2.5%. In late 2013, the Fed announced that it would begin scaling
back long-term bond purchases to $75 billion per month in January 2014 and
reduce them further as conditions warranted; the Fed ended the purchases during
the summer of 2014. In 2014, the unemployment rate dropped to 6.2%, and
continued to fall to 5.5% by mid-2015, the lowest rate of joblessness since
before the global recession began; inflation stood at 1.7%, and public debt as
a share of GDP continued to decline, following several years of increase.
|
Source
: CIA |
Company name: PPG INDUSTRIES, INC.
Headquarters: One PPG Place, Pittsburgh, PA 15272 -
USA
Telephone: +1
412-434-3131
Fax: +1 412-434-3125
Website: www.ppg.com
Corporate ID#: 284424
State: Pennsylvania
Judicial form: Public Company (NYSE = PPG)
Date incorporated: 08-24-1883
Stock: 270,721,376 shares common (as of 09-30-2014)
Value: USD
1.66 2/3 par value
Name of manager: Charles
E. BUCH
Business:
PPG Industries, Inc. manufactures and distributes coatings, optical and
specialty materials, and glass products.
The company operates in five segments: Performance Coatings, Industrial
Coatings, Architectural Coatings, Optical and Specialty Materials, and Glass.
It offers coatings products for automotive and commercial
transport/fleet repair and refurbishing, light industrial coatings, and
specialty coatings for signs; sealants, coatings, maintenance cleaners, and
transparencies for commercial, military, regional jet, and general aviation
aircraft and transparent armor for
specialty applications; and coatings and finishes for the protection of metals
and structures to metal fabricators, heavy duty maintenance contractors, and manufacturers
of ships, bridges, and rail cars.
The company also provides industrial and automotive coatings for
manufacturing companies; adhesives and sealants for the automotive industry;
metal pretreatments and related chemicals for industrial and automotive
applications; and packaging coatings to aerosol, food, and beverage container
manufacturers.
In addition, it offers architectural coatings used by painting and
maintenance contractors and by consumers to decorate and maintain residential
and commercial building structures, as well as purchased sundries to painting
contractors and consumers.
Further, the company provides optical products, such as lenses, optical
lens materials, and sun lenses; silicas comprising amorphous precipitated
silicas for tire, battery separator, and other end-use markets; and substrates
used for radio frequency identification tags and labels, e-passports, drivers’
licenses, and identification cards applications. Additionally, it offers flat
glass and continuous-strand fiber glass products for commercial and residential
construction markets, and the wind energy, energy infrastructure,
transportation, and electronics industries. The company was founded in 1883 and
is headquartered in Pittsburgh, Pennsylvania.
EIN: 25-0730780
Staff: 44,400
Operations & branches:
At the headquarters, we
find a large factory, warehouse and office, owned.
The Company maintains
several factories in the U.S.
Shareholders:
The Company is listed with
the NYSE under symbol PPG.
As of 06-30-2015, 72% of
the stock was held by institutional and mutual fund owners, including:
|
Vanguard Group, Inc. (The) |
6.22% |
|
FMR, LLC |
5.30% |
|
Massachusetts Financial Services Co. |
4.30% |
|
State Street Corporation |
4.22% |
|
BlackRock Institutional Trust Company, N.A. |
2.60% |
Management:
Charles E. BUNCH is Executive Chairman.
Born in 1950
Mr. Charles E. Bunch has been the Chief Executive Officer of PPG
Industries Inc. since March 31, 2005. Mr. Bunch served as President and Chief
Operating Officer of PPG Industries Inc. from July 2002 to March 31, 2005. He
began his PPG career in 1979, starting as an Assistant to the Corporate
Controller. He served as an Executive Vice President of PPG Industries Inc.
from 2000 to 2002 and as its Senior Vice President for Strategic Planning and
Corporate Services from 1997 to 2000. He served in numerous accounting and
Financial Analyst Assignments at PPG factories in the US and at its Paris
office and served as Managing Director of PPG's Italian glass subsidiary. Mr.
Bunch returned to PPG's headquarters in 1987 and held a succession of senior
management positions in distribution, purchasing, architectural coatings, fiber
glass, strategic planning, and corporate services. He has been Chairman of PPG
Industries Inc. since July 1, 2005. He served as Chairman of The Federal
Reserve Bank of Cleveland. Mr. Bunch has been a Director of PNC Financial
Services Group Inc. since April 2007 and PPG Industries Inc. since 2002. He has
been an Independent Director of HJ Heinz Co. since July 10, 2003. He serves as
a Trustee of University of Pittsburgh. He served as a Director of Mercantile
Bankshares Corp.
Mr. Bunch studied Degree in International Affairs from Georgetown
University and MBA from the Harvard University Graduate School of Business
Administration.
Michael H. McGARRY is the President and CEO.
He has been the Chief Executive Officer of PPG Industries, Inc. since
September 1, 2015 and has been its the President since March 1, 2015.
Mr. McGarry served as Chief Operating Officer of PPG Industries Inc.
from August 1, 2014 to September 1, 2015. Mr. McGarry served as an Executive
Vice President of PPG Industries Inc. since September 1, 2012 until August 1,
2014. Mr. McGarry served as the Head of Architectural Coatings for Americas,
Asia Pacific & EMEA at PPG Industries Inc. since February 21, 2013. Mr.
McGarry has leadership responsibility for PPG's Asia Pacific region, its global
aerospace products and automotive refinish businesses, and its commodity chemical
business, which merged with Georgia Gulf to become Axiall. His responsibilities
also include corporate oversight for all PPG environmental, health and safety
activities and the global information technology function. He served as Senior
Vice President of Commodity Chemicals at PPG Industries Inc. from July 1, 2008
to September 1, 2012 and was responsible for its Commodity Chemicals reporting
segment and chlor-alkali and Derivatives Business Unit. He served as the
Managing Director of PPG Europe and Vice President of Coatings Europe of PPG
from July 1, 2006 to June 2008. Mr. McGarry served as Vice President of
Chlor-alkali and Derivatives of PPG Industries Inc. from March 1, 2004 to July
1, 2006 and served as its General Manager of Fine Chemicals since 2000. He
joined PPG in 1981 as an Engineer at Chemicals Complex of PPG Industries Inc.
Mr. McGarry served through a series of management assignments of increasing
responsibility, including Market Development Manager of Silica Products,
Operations Manager of Silicas, Thailand, Business Manager of Teslin Sheet and
Product Manager in the Derivatives, Chlorine, Liquid and Dry Caustic Soda
Businesses. He has been a Director of PPG Industries Inc. since July 16, 2015.
He has been Director of Axiall Corporation (formerly known as Georgia Gulf
Corporation) since January 31, 2013.
Mr. McGarry holds a Mechanical Engineering degree at the University of
Texas.
Frank S. SKLARSKY is the CFO.
Subsidiaries &
Partnership: Numerous subsidiaries in the U.S. and
worldwide.
On attachment:
- 10K 2013
- 10K 201
- 3rd 10Q 2015
On October 15, 2015, PPG Industries, Inc. reported unaudited
consolidated earnings results for the third quarter and nine months ended
September 30, 2015.
For the quarter, the company reported net sales of $3,872 million
compared to $3,935 million a year ago. Income from continuing operations before
income taxes was $581 million compared to $499 million a year ago.
Income from continuing operations, net of income taxes was $439 million
compared to $383 million a year ago. Net income attributable to the company was
$433 million compared to $371 million a year ago. Diluted earnings per share
were $1.59 compared to $1.33 a year ago. Adjusted net income from continuing
operations was $439 million, or $1.61 per diluted share compared to $394
million, or $1.41 per diluted share for the same period a year ago.
For the nine months, the company reported net sales of $11,634 million
compared to $11,653 million a year ago. Income from continuing operations
before income taxes was $1,463 million compared to $1,395 million a year ago.
Income from continuing operations, net of income taxes was $1,107 million
compared to $1,065 million a year ago. Net income attributable to the company
was $1,092 million compared to $2,019 million a year ago. Diluted earnings per
share were $3.98 compared to $7.21 a year ago.
Banks: JP Morgan Chase
Legal filings
& complaints:
As of today date, there are several legal filing pending with the
various State Courts.
Secured debts summary (UCC):
Numerous
Trade references:
Date reported: October 2015
High credit: USD 100,000+
Now owing: 0
Past due: 0
Last purchase: September 2015
Line of business: Office supply
Paying status: 5 days beyond terms
Date reported: October 2015
High credit: USD 48,000,000+
Now owing: 0
Past due: 0
Last purchase: September 2015
Line of business: Payroll
Paying status: As agreed
Date reported: October 2015
High credit: USD 3,900
Now owing: 0
Past due: 0
Last purchase: September 2015
Line of business: Telecommunications
Paying status: On 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 |
||
|
05/15 |
$6,960,000 |
69% |
20% |
4% |
2% |
5% |
|
06/15 |
$6,304,600 |
59% |
27% |
4% |
4% |
6% |
|
07/15 |
$5,849,600 |
62% |
25% |
4% |
3% |
6% |
|
08/15 |
$6,848,000 |
67% |
20% |
4% |
4% |
5% |
|
09/15 |
$6,678,200 |
68% |
21% |
3% |
3% |
5% |
|
10/15 |
$5,911,100 |
65% |
21% |
5% |
3% |
6% |
National Credit Bureaus
gave a medium credit rating.
According to our credit analysts, during the last 6 months, domestic
payments were made with an average of 10 days beyond terms.
International
credit history:
Payments of imports are currently made on terms.
Other comments:
The Company is developing
its business.
The Company is in good
standing.
This means that all local
and federal taxes were paid on due date.
The risk remains 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.66.75 |
|
|
1 |
Rs.100.68 |
|
Euro |
1 |
Rs.70.88 |
|
USD |
1 |
Rs.66.79 |
Note :
Above are approximate rates obtained from sources believed to be correct
INFORMATION DETAILS
|
Analysis Done by
: |
KAS |
|
|
|
|
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.