|
Report No. : |
341010 |
|
Report Date : |
16.09.2015 |
IDENTIFICATION DETAILS
|
Name : |
CABOT CORPORATION |
|
|
|
|
Registered Office : |
2 Seaport Lane, Ste 1300, Boston, MA 02210 |
|
|
|
|
Country : |
United States |
|
|
|
|
Financials (as on) : |
30.06.2015 (Unaudited - Consolidated) |
|
|
|
|
Year of Establishment : |
1882 |
|
|
|
|
Legal Form : |
Public Company |
|
|
|
|
Line of Business : |
|
|
|
|
|
No. of Employees : |
4,737 |
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 : |
Slow but correct |
|
|
|
|
Litigation : |
Exist |
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: CABOT CORPORATION
Address: 2 Seaport Lane, Ste 1300, Boston, MA 02210 - USA
Telephone: +1 617-345-0100
Fax: +1 617-342-6312
Website: www.cabot-corp.com
Corporate ID#: 0554501
State: Delaware
Judicial form: Public Company (NYSE = CBT)
Date incorporated: 07-14-1960
Stock: 200,000,000
shares common
62,914,994 shares issued and outstanding
(as of August 4, 2015)
2,000,000 shares preferred (none issued)
Value: USD
1= par value
Name of
manager: Patrick M. PREVOST
Business:
Cabot Corporation operates as a specialty chemicals and performance materials company. The company offers carbon black, a form of elemental carbon used to enhance the physical properties of the systems and applications in which it is incorporated; and rubber blacks for use as a rubber reinforcing agent and performance additive in tires, hoses, belts, extruded profiles, and molded goods.
It also designs, manufactures, and sells specialty grades of carbon black and thermoplastic concentrates and compounds; and fumed silica, fumed alumina, and dispersions for automotive, construction and infrastructure, and electronics and consumer products sectors. In addition, the company manufactures and sells aqueous inkjet colorants to the inkjet printing market; and aerogel, a hydrophobic, silica-based particle for use in various thermal insulation and specialty chemical applications.
Further, it offers elastomer composite products that are compounds of natural latex rubber and carbon black primarily for tire applications; and cesium formate, a drilling and completion fluid for use in high pressure and high temperature oil and gas well construction.
Additionally, Cabot Corporation produces and markets activated carbon product used for the purification of water, air, food and beverages, pharmaceuticals, and other liquids and gases; as a chemical carrier; and as a colorant or a decolorizing agent.
The company sells its products primarily through distributors and sales representatives in the Americas, Europe, the Middle East, Africa, and the Asia Pacific.
Cabot Corporation was founded in 1882 and is headquartered in Boston, Massachusetts.
EIN: 04-6035227
Staff: 4,737
Operations & branches:
At above
address, we find the corporate office, on lease.
The Company
maintains several branches in the U.S.
Shareholders:
The Company is listed with the NYSE under symbol CBT.
As of 06-30-2015, 87% of the stock is held by institutional and mutual fund owners, including:
|
Vanguard Group, Inc. (The) |
5.98% |
|
Deprince, Race & Zollo, Inc. |
4.38% |
|
BlackRock Institutional Trust Company, N.A. |
4.31% |
|
Lsv Asset Management |
4.28% |
|
Wellington Management Company, LLP |
3.57% |
Management:
Patrick M. PREVOST has been the Chief Executive Officer and President of Cabot Corporation since January 1, 2008.
Mr. Prevost joined Cabot in 2008. He served as an Executive Vice President of BASF Corporation since December 2003. He served as the President of chemicals businesses in North America of BASF Corporation. He was responsible for BASF's Petrochemicals, Performance Chemicals, Intermediates, Inorganics, Functional Polymers and Superabsorbents businesses in North America, and has management responsibility for BASF's Canadian operations. He served as the President, Performance Chemicals Division of BASF AG from October 2005 to November 2007.
He served as President of Chemicals & Plastics Division for BASFCorporation from December 2003 to October 2005. He served as senior executive at BP plc, which he joined via the acquisition of Amoco Corporation in 1999. He served as Vice President of Strategy and Planning of BP Chemicals in London, England from September 2001 to December 2003. Mr. Prevost served as the Chief Executive of the Terephthalic Acid (PTA) business with responsibility for the Americas, Europe, the Middle East and Africa, while based in Naperville, Ill from 1999 to 2001.
Prior to 1999, he held multiple operational and functional leadership positions at Amoco. He served with Amoco Chemical Company and BP Chemicals for 21 years. During his career, he held positions in technical service, business development, marketing and general management. From 1994 to 1997, Mr. Prevost served as Vice President of Chemical Intermediates at Amoco Europe in Geneva, Switzerland, and from 1997 to 1998, he served as Vice President of Global Business Management, Lisle, Ill. He served as the Chairman of the Supervisory Board of Amoco Fabrics in Germany from 1995 to 1998. He has been a Director of Cabot Corporation since January 1, 2008. He has been an Independent Director of General Cable Corp. since September 7, 2010. He serves as a Director of American Chemistry Council, Inc. Mr. Prevost earned a BS Degree in chemistry from University of Geneva in Switzerland, and a master's degree in business administration from University of Chicago.
John F. O’BRIEN is Chairman and Director.
Eduardo E. CORDEIRO is Executive Vice President and CFO.
Subsidiaries
And partnership: Numerous subsidiaries in the U.S.
and worldwide.
On August 4, 2015, Cabot Corporation announced unaudited consolidated earnings results for the third quarter and nine months ended June 30, 2015.
For the quarter, net sales and other operating revenues were $694 million against $940 million a year ago. Income from operations was $68 million against $93 million a year ago. Loss from continuing operations before income taxes and equity in earnings of affiliated companies was $509 million against income from continuing operations before income taxes and equity in earnings of affiliated companies of $80 million a year ago. Loss from continuing operations was $444 million against income from continuing operations of $58 million a year ago. Net loss attributable to company was $445 million or $7.04 per diluted common share against net income attributable to company of $52 million or $0.78 per diluted common share a year ago. Diluted loss per share of common stock attributable to company from continuing operations were $7.05 against diluted earnings per share of common stock attributable to company from continuing operations of $0.79 a year ago. Adjusted EPS was $0.64 compared to $0.88 a year ago.
Cash provided by operating activities was $73 million against $116 million a year ago. Additions to property, plant and equipment was $33 million against $45 million a year ago. The company generated adjusted EBITDA of $120 million. For the nine months, net sales and other operating revenues were $2,200 million against $2,736 million a year ago. Income from operations was $186 million against $248 million a year ago.
Loss from continuing operations before income taxes and equity in earnings of affiliated companies was $419 million against income from continuing operations before income taxes and equity in earnings of affiliated companies of $237 million a year ago. Loss from continuing operations was
$368 million against income from continuing operations of $184 million a year ago. Net loss attributable to company was $374 million, $5.88 per diluted common share against net income attributable to company of $168 million, $2.55 per diluted common share a year ago. Diluted loss per share of common stock attributable to company from continuing operations were $5.89 against diluted earnings per share of common stock attributable to company from continuing operations of $2.58 a year ago. Adjusted EPS was $1.97 compared to $2.58 a year ago. Cash provided by operating activities was $278 million against $185 million a year ago. Additions to property, plant and equipment was $103 million against $115 million a year ago.
The net loss includes an after-tax charge of $486 million from certain items, principally reflecting non-cash impairment charge of $482 million associated with the Purification Solutions segment.
For 2015, in view of this current environment, the company remains highly focused on managing costs and cash flow. At this stage, the company had reduced fixed costs by $25 million compared to last year and cut back capital spending by approximately $100 million from beginning of year expectations. The company expects to yield free cash flow of $350 to $400 million. The company anticipated capital expenditures for the year to be approximately $150 million, and operating tax rate for fiscal 2015 to be between 27% and 28%. For the quarter, the company reported long-lived assets impairment charge of $209 million and goodwill impairment charge of $353 million.
On
attachment:
- 10K 2014
- 3nd
10Q 2015
Banks: First National Bank of Boston
State Street Bank &
Trust
...
Legal filings & complaints:
As of today date, there are several legal filings pending with various Courts, involving the Company as plaintiff or defendant.
Secured debts summary (UCC): None
Trade
references:
Date
reported: August 2015
High
credit: USD 50,000
Now owing: 0
Past due: 0
Last
purchase: July 2015
Line of
business: Office supply
Paying
status: 8 days beyond terms
Date
reported: August 2015
High
credit: USD 6,000,000
Now owing: 0
Past due: 0
Last
purchase: July 2015
Line of
business: Payroll
Paying
status: As agreed
Date
reported: August 2015
High
credit: USD 3,500
Now owing: 0
Past due: 0
Last purchase:
July 2015
Line of
business: Telecommunications
Paying
status: 8 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 |
||
|
03/15 |
$1,116,900 |
79% |
14% |
5% |
1% |
1% |
|
04/15 |
$1,167,600 |
81% |
13% |
4% |
1% |
1% |
|
05/15 |
$1,065,200 |
66% |
32% |
1% |
0% |
1% |
|
06/15 |
$1,477,500 |
80% |
8% |
11% |
0% |
1% |
|
07/15 |
$1,540,500 |
75% |
14% |
1% |
9% |
1% |
|
08/15 |
$1,457,600 |
78% |
10% |
2% |
0% |
10% |
National
Credit Bureaus gave a medium credit risk.
According to our credit analysts, during the last 6 months, domestic payments were made with an average of 10 days beyond terms.
Other comments:
We noted a
decrease in sales since June 2015.
The Company
is in good standing.
This means
that all local and federal taxes were paid on due date.
Last report
was filed on 12-15-2014.
The risk is
medium.
Our opinion:
A business
connection may be conducted but we suggest you to check regularly the way of
payments.
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.66.44 |
|
UK Pound |
1 |
Rs.102.41 |
|
Euro |
1 |
Rs.75.05 |
INFORMATION DETAILS
|
Analysis Done by
: |
DIV |
|
|
|
|
Report Prepared
by : |
VNT |
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.