PM wins an AAA-rating for his responsible approach to stimulus

Original article by Patrick Commins
The Australian – Page: 6 : 28-Nov-19

S&P Global Ratings has praised the federal government’s commitment to a balanced Budget rather than pursuing stimulus measures. The ratings agency has warned that any fiscal stimulus that led to a change in the trajectory of the Budget could jeopardise Australia’s coveted triple-A credit rating. Anthony Walker, S&P’s director of sovereign ratings, has also warned that fiscal stimulus is likely to affect the nation’s ability to respond to future unforeseen economic shocks.

CORPORATES
S&P GLOBAL RATINGS, AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET, RESERVE BANK OF AUSTRALIA

Credit raters circle wagons around banks

Original article by James Eyers, James Frost
The Australian Financial Review – Page: 11 & 14 : 10-Oct-19

Australia’s banks are under growing scrutiny over their failure to reduce their mortgage interest rates by 0.25 per cent in line with the latest official interest rate cut. However, S&P Global Ratings says banks’ profits and capital buffers may be adversely affected if they yield to political pressure and match the Reserve Bank’s rate cut. S&P adds that this could in turn prompt a review of the banking sector’s credit rating. Moody’s Investors Service and Fitch Ratings are also supportive of the banks’ decision to withhold part of the official interest rate cut.

CORPORATES
S&P GLOBAL RATINGS, MOODY’S INVESTORS SERVICE INCORPORATED, FITCH RATINGS LIMITED, RESERVE BANK OF AUSTRALIA, IBISWORLD PTY LTD, COPLEY FUND RESEARCH, AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET

AMP’s credit ratings still at risk after stalled life sale

Original article by Jonathan Shapiro, James Frost
The Australian Financial Review – Page: 13 & 16 : 17-Jul-19

S&P Global has advised that AMP’s credit rating will remain on negative watch after the Reserve Bank of New Zealand imposed conditions on the sale of its life insurance business. Nicholas Yap of Nomura believes that AMP is likely to face a credit ratings downgrade at some point, citing factors such as a reduction in the value of its life business and a class action lawsuit over excessive superannuation fees. AMP shares fell 1.6 per cent to $1.78 on 16 July.

CORPORATES
AMP LIMITED – ASX AMP, AMP LIFE LIMITED, S&P GLOBAL RATINGS, NOMURA AUSTRALIA LIMITED, RESOLUTION LIFE GROUP LIMITED, RESERVE BANK OF NEW ZEALAND, MOODY’S INVESTORS SERVICE INCORPORATED, MACQUARIE GROUP LIMITED – ASX MQG, CITIGROUP PTY LTD, MORGAN STANLEY AUSTRALIA LIMITED

S&P upgrades outlook for big four banks

Original article by Tim Boyd
The Australian Financial Review – Page: 19 : 11-Jul-19

The Australian Prudential Regulation Authority’s move to scale back its capital requirements for the banking sector has prompted S&P Global Ratings to upgrade its outlook for the nation’s four major banks from ‘negative’ to ‘stable’. The credit ratings agency has also upgraded Macquarie Bank’s outlook from ‘developing’ to ‘positive’. Meanwhile, S&P has indicated that a sharp correction in residential property prices is the biggest risk factor for Australian banks.

CORPORATES
S&P GLOBAL RATINGS, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, MACQUARIE BANK LIMITED – ASX MBL, BELL POTTER SECURITIES LIMITED

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 concerned big banks may lose support in a crisis

Original article by James Eyers
The Australian Financial Review – Page: 15 & 20 : 10-Apr-19

A report from S&P Global Ratings says the federal government is likely to remain "highly supportive" of Australia’s major banks in the event of a crisis. However, the ratings agency adds that there is a one-in-three chance that the government will change its position to "supportive" over the next two years. Any change in the government’s level of support for the major banks would most likely prompt their credit ratings to be downgraded, which in turn would increase their funding costs.

CORPORATES
S&P GLOBAL RATINGS, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, COUNCIL OF FINANCIAL REGULATORS

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

Trust gap will crank up bank funding costs

Original article by Jonathan Shapiro
The Australian Financial Review – Page: 17 & 20 : 4-Oct-18

Fitch Ratings has warned that a loss of trust in Australian banks in the wake of the financial services royal commission may result in higher wholesale funding costs. Fitch adds that banks may find it hard to pass the increased costs on to borrowers in the current climate. The credit ratings agency also notes that banks could potentially face increased compliance costs and a greater risk of class actions as a result of any recommendations made by the inquiry in its final report. Fitch has retained its negative outlook on banks.

CORPORATES
FITCH RATINGS LIMITED, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, S&P GLOBAL RATINGS, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, CLSA AUSTRALIA PTY LTD

AAA outlook remains negative: S&P

Original article by Jacob Greber
The Australian Financial Review – Page: 6 : 10-May-18

Credit ratings agency Standard & Poor’s has welcomed the Federal Government’s "fiscal prudence" in its May 2018 Budget. However, the firm has retained its negative outlook for Australia’s sovereign rating due to global factors such as the potential for an international trade war. Meanwhile, Jeremy Zook of Fitch Ratings says the Government’s revenue forecasts are "optimistic" and may affect its ability to deliver a surplus ahead of schedule.

CORPORATES
STANDARD AND POOR’S FINANCIAL SERVICES LLC, FITCH RATINGS LIMITED, ERNST AND YOUNG, AUSTRALIA. DEPT OF THE TREASURY, MORGAN STANLEY AUSTRALIA LIMITED