Stick to surplus to keep AAA

Original article by John Kehoe
The Australian Financial Review – Page: 1 & 4 : 9-Jul-19

S&P Global Ratings upgraded Australia’s credit rating outlook to ‘stable’ in September 2018. S&P’s Anthony Walker says the federal government must retain its target of returning the Budget to surplus in 2019-20 in order to retain its triple-A credit rating. He has stressed the need for the government to have a strong public balance sheet so it can respond with fiscal stimulus if there is an external shock to the economy in the future. Martin Petch of Moody’s Investors Service in turn says the Australian economy will be boosted by factors such as the government’s income tax cuts, official interest rate cuts and spending on infrastructure.

CORPORATES
S&P GLOBAL RATINGS, MOODY’S INVESTORS SERVICE INCORPORATED, AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET, AUSTRALIA. DEPT OF THE TREASURY, AUSTRALIAN LABOR PARTY, RESERVE BANK OF AUSTRALIA, HSBC AUSTRALIA HOLDINGS PTY LTD

S&P cuts AMP rating, more action to come

Original article by James Frost
The Australian Financial Review – Page: 17 : 5-Mar-19

Ratings agency Standard & Poor’s has downgraded AMP’s credit rating from ‘A’ to ‘A-‘ in the wake of the wealth manager’s decision to sell its life insurance arm. S&P has flagged the potential for a further downgrade once the sale is completed, noting that the deal will affect AMP’s creditworthiness. Rival ratings agency Moody’s Investor Services recently downgraded the credit rating of AMP Life after it posted a 2018 operating loss of $176m.

CORPORATES
AMP LIMITED – ASX AMP, AMP LIFE LIMITED, STANDARD AND POOR’S FINANCIAL SERVICES LLC, MOODY’S INVESTORS SERVICE INCORPORATED, AMP BANK LIMITED, RESOLUTION LIFE GROUP LIMITED, CREDIT SUISSE (AUSTRALIA) LIMITED

Rio debt upgrade as iron ore rises

Original article by James Thomson
The Australian Financial Review – Page: 22 : 8-Feb-19

Moody’s Investors Service has upgraded its rating on Rio Tinto’s debt from A3 to A2. The credit ratings agency has noted that Rio Tinto is better-placed to ride out periods of increased volatility in commodity prices as a result of its debt reduction strategy. The resources giant has slashed its debt from US28.5bn in 2013 to just $US12.5bn. Meanwhile, the iron ore price has risen to almost $US90 per tonne in the wake of the latest tailings dam disaster in Brazil, and some analysts say it could test $US100.

CORPORATES
RIO TINTO LIMITED – ASX RIO, MOODY’S INVESTORS SERVICE INCORPORATED, VALE SA

BHP oil division stymies S&P upgrade

Original article by Peter Ker
The Australian Financial Review – Page: 15 : 14-Mar-18

BHP Billiton has reduced its net debt by US10.5bn ($A13.3bn) since Standard & Poor’s downgraded its credit rating from "A+" to "A" in 2016. Although S&P has since upgraded BHP’s outlook from "negative" to "stable", analyst Elad Jelasko says a decline in BHP’s portfolio diversification has contributed to the lack of a credit rating upgrade. He notes that the downturn in earnings from BHP’s petroleum division has helped to offset the positive impact of the reduction in net debt. Jelasko adds that the proposed sale of BHP’s US shale assets is unlikely to affect its credit rating.

CORPORATES
BHP BILLITON LIMITED – ASX BHP, STANDARD AND POOR’S FINANCIAL SERVICES LLC, RIO TINTO LIMITED – ASX RIO, SAMARCO MINERACAO SA

Stocks fall on banks’ failure to alter levy

Original article by Richard Gluyas
The Australian – Page: 23 : 21-Jun-17

Shares in Australia’s four major banks and Macquarie Group were sold down on 21 June, in response to the passage of the Federal Government’s bank levy through Parliament and credit ratings downgrades by Moody’s. The Senate economics legislation committee made a number of recommendations concerning the levy, based on the suggestions of the five banks that will pay it, but they were rejected by the Government. Meanwhile, Deutsche Bank does not expect banks’ funding costs to be affected by the ratings downgrades.

CORPORATES
COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, WESTPAC BANKING CORPORATION – ASX WBC, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, MACQUARIE GROUP LIMITED – ASX MQG, DEUTSCHE BANK AG, AUSTRALIA. DEPT OF THE TREASURY, AUSTRALIA. SENATE ECONOMICS LEGISLATION COMMITEE, AUSTRALIAN COMPETITION AND CONSUMER COMMISSION

Moody’s trims bank ratings on rising debt

Original article by Michael Roddan
The Australian – Page: 21 : 20-Jun-17

Moody’s has lowered its credit ratings for Australia’s four major banks, along with eight other smaller banks. Among the smaller banks to have their ratings downgraded are Bendigo & Adelaide Bank, ME Bank, Heritage Bank and Credit Union Australia. Francesco Mirenzi of Moody’s said the downgrades were prompted by concerns over high household debt and the possibility of a correction in the housing market.

CORPORATES
MOODY’S INVESTORS SERVICE INCORPORATED, BENDIGO AND ADELAIDE BANK LIMITED – ASX BEN, MEMBERS EQUITY BANK PTY LTD, HERITAGE BANK LIMITED – ASX HBS, CREDIT UNION AUSTRALIA LIMITED, STANDARD AND POOR’S (AUSTRALIA) PTY LTD, BANK OF QUEENSLAND LIMITED – ASX BOQ, WESTPAC BANKING CORPORATION – ASX WBC, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, NEWCASTLE PERMANENT BUILDING SOCIETY LIMITED, TEACHERS MUTUAL BANK LIMITED, QT MUTUAL, TEACHERS MUTUAL VICTORIA

NAB downplays ‘inevitable’ AAA rating loss

Original article by Michael Roddan
The Australian – Page: 23 : 5-May-17

National Australia Bank has conceded that the loss of Australia’s coveted triple-A credit rating would result in a corresponding downgrade of the bank’s credit rating. However, group treasurer Shaun Dooley says this would have no impact on the bank’s domestic funding costs, while the cost of international funding would rise by about 10 basis points. Dooley adds that international investors have indicated that they would continue to invest in Australian banks if the nation’s credit rating were downgraded.

CORPORATES
NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, MOODY’S INVESTORS SERVICE INCORPORATED, STANDARD AND POOR’S FINANCIAL SERVICES LLC, FITCH RATINGS LIMITED, AUSTRALIA. DEPT OF THE TREASURY, DELOITTE ACCESS ECONOMICS PTY LTD, WESTPAC BANKING CORPORATION – ASX WBC, RESERVE BANK OF AUSTRALIA

Moody’s deals blow to Elliott BHP plan

Original article by Peter Ker
The Australian Financial Review – Page: 25 : 4-May-17

Moody’s Investors Service has upgraded BHP Billiton’s "A3" credit rating outlook from "stable" to "positive". The ratings agency has cited factors such as BHP’s prospects for further growth in earnings and free cashflow due to the continued strength of commodity prices. However, Moody’s adds that the restructuring proposals of activist hedge fund Elliott Management could adversely affect BHP’s credit rating.

CORPORATES
BHP BILLITON LIMITED – ASX BHP, MOODY’S INVESTORS SERVICE INCORPORATED, ELLIOTT MANAGEMENT CORPORATION, ELLIOTT ASSOCIATES LIMITED PARTNERSHIP

Big miners defy iron ore price slide to hold firm

Original article by Matt Chambers
The Australian – Page: 20 : 20-Apr-17

The iron ore price has shed 33 per cent in the last month, and it has now fallen to a six-month low. However, ratings agency Standard & Poor’s has upgraded its average price forecast for 2017 from $US55 per tonne to $US66. The firm has also upgraded Rio Tinto’s "A-" credit rating from "stable" to "positive", and flagged the potential for a further upgrade within 12-18 months. Shares in Australia’s three largest iron ore producers were resilient in local trading on 19 April, despite the falling iron price.

CORPORATES
RIO TINTO LIMITED – ASX RIO, BHP BILLITON LIMITED – ASX BHP, FORTESCUE METALS GROUP LIMITED – ASX FMG, STANDARD AND POOR’S FINANCIAL SERVICES LLC, NIKKO ASSET MANAGEMENT GROUP, MERRILL LYNCH (AUSTRALIA) PTY LTD, FREEPORT-McMORAN COPPER AND GOLD INCORPORATED

‘White elephant’ desalination plant placed on ratings watch

Original article by Ben Potter
The Australian Financial Review – Page: 8 : 10-Jan-17

Fitch Ratings has placed Victoria’s Wonthaggi desalination plant on negative watch. The credit rating agency stated on 6 January 2017 that the negative watch move is related to the recent equipment failure, which raised doubts about the plant’s financial position. The plant is owned and operated by Aquasure, which has debts of $A3.65 billion. Fitch rates Aquasure’s senior debt "A-" and S&P Global Ratings rates it "BBB+".

CORPORATES
FITCH RATINGS LIMITED, S&P GLOBAL RATINGS, AQUASURE, UNISUPER LIMITED, SUEZ ENVIRONMENT, KOOKMIN BANK LIMITED, ITOCHU CORPORATION, CIMIC GROUP LIMITED – ASX CIM