CREDIT RATINGS – AUSTRALIA

BHP oil division stymies S&P upgrade

roymorgansocial Leave a comment

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

roymorgansocial Leave a comment

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

roymorgansocial Leave a comment

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

roymorgansocial Leave a comment

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

roymorgansocial Leave a comment

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

roymorgansocial Leave a comment

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

roymorgansocial Leave a comment

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

Treasurer won’t pledge to a surplus

roymorgansocial Leave a comment

Original article by Jacob Greber
The Australian Financial Review – Page: 1 & 4 : 21-Dec-16

The expected Budget surplus of $A1.087bn in 2020-21 equates to about 0.05 per cent of GDP. Ratings agencies have warned that the Federal Government must achieve a surplus by 2020-21 in order to retain its triple-A credit rating, but Treasurer Scott Morrison claims that he has never committed to that target date. He says the Government will seek to balance the Budget as quickly and responsibly as possible, and stressed that this will require the support of Parliament.

CORPORATES
AUSTRALIA. DEPT OF THE TREASURY, MOODY’S INVESTORS SERVICE INCORPORATED, S&P GLOBAL RATINGS, KPMG AUSTRALIA PTY LTD, SEEK LIMITED – ASX SEK, MYOB GROUP LIMITED – ASX MYO, WESFARMERS LIMITED – ASX WES

Downgrade is on its way

roymorgansocial Leave a comment

Original article by Philip Baker
The Australian Financial Review – Page: 1 : 20-Dec-16

S&P Global Ratings, Moody’s Investors Service and Fitch Ratings have decided against downgrading Australia’s AAA credit rating following the release of the Mid-Year Economic and Fiscal Outlook on 19 December 2016. However, S&P warned that Australia’s fiscal position could worsen. Stephen Walters, chief economist at the Australian Institute of Company Directors, says Australia is almost certain to lose the highest credit rating.

CORPORATES
AUSTRALIA. DEPT OF THE TREASURY, AUSTRALIA. DEPT OF FINANCE, S&P GLOBAL RATINGS, MOODY’S INVESTORS SERVICE INCORPORATED, FITCH RATINGS LIMITED, AUSTRALIAN INSTITUTE OF COMPANY DIRECTORS

AAA could go at any time

roymorgansocial Leave a comment

Original article by Phillip Coorey
The Australian Financial Review – Page: 1 & 6 : 15-Dec-16

Moody’s Investors Service and S&P Global Ratings have signalled that Australia’s triple-A credit rating could potentially be downgraded on 19 December 2016, following the release of the mid-year budget update. Both credit rating agencies have previously warned that the triple-A rating could be at risk if the Government fails to meet its target of 2020-21 for returning the Budget to surplus. Meanwhile, Adam Boynton of Deutsche Bank has forecast that nominal GDP growth will be 3.25 per cent in 2017-18, compared with the May Budget forecast of five per cent.

CORPORATES
MOODY’S INVESTORS SERVICE INCORPORATED, S&P GLOBAL RATINGS, DEUTSCHE BANK AG, CITIGROUP PTY LTD, AUSTRALIA. DEPT OF THE TREASURY, AUSTRALIAN LABOR PARTY