About Good Returns  |  Advertise  |  Contact Us  |  Terms & Conditions  |  RSS Feeds Other Sites:   depositrates.co.nz  |   landlords.co.nz
Last Article Uploaded: Tuesday, May 3rd, 10:09AM
rss
Investment News

Corporate collapses dent overall credit quality

Credit quality has continued to decline in the Australian and New Zealand capital markets over the first nine months of 2001.

Tuesday, October 2nd 2001, 8:20AM

Credit quality has continued to decline in the Australian and New Zealand capital markets over the first nine months of 2001, Standard & Poor’s managing director Chris Dalton says.

Using the number of rating upgrades and downgrades as a barometer of underlying credit quality, S&P says that local movements reflect global credit market trends for downgrades to outweigh upgrades by ratios of up to four-to-one.

However, the local trend is much less pronounced.

According to S&P, a total of 19 Australian and New Zealand companies were upgraded in the first three quarters of the year, compared with 38 downgraded during the same period.

"The overall two-to-one ratio of local downgrades to upgrades mirrors the pattern seen in global credit markets," Dalton says. "However, the lower multiple evident in Australia and New Zealand can, in part, be attributed to the absence of a local speculative grade bond market."

Within Australia and New Zealand the corporate sector bore the brunt of rating activity during the first three quarters of 2001 and presents a much bleaker picture than the headline data. A total of six corporate issuers were upgraded in the first nine months of this year compared to 27 downgrades.

This quarter’s ratio of 4.5 to one is an increase on the ratio for the first six months of this year.

"Not only is the trend of deteriorating credit quality evident in our downgrades but, of the 114 corporate entities currently rated by S&P in Australia and New Zealand, only five have either a positive outlook, or creditwatch positive, on their rating," Dalton says.

"Compared with the data to June 2001, the percentage of entities with negative outlooks, or with ratings on creditwatch negative, has increased from 19% to 27%of all corporate ratings in Australia and New Zealand."

Dalton highlights the rating of Pasminco, which has been lowered four times this year, and Air New Zealand, which has been downgraded twice, as indicative of the underlying trend.

He says that a turnaround in the downward trend of credit quality isn't expected any time soon.

"The collapse of Ansett and the uncertainty in world markets mean that Australian and New Zealand companies are facing increasing challenging times from a credit perspective," he says.

« Cool calm answers to hard questionsKing builds an empire »

Special Offers

Commenting is closed

 

print

Printable version  

print

Email to a friend

Good Returns Investment Centre is bought to you by:

Subscribe Now

Keep up to date with the latest investment news
Subscribe to our newsletter today

Edison Investment Research
  • The North American Income Trust
    26 April 2016
    Above-average yield from a concentrated portfolio
    The North American Income Trust (NAIT) is a concentrated portfolio of primarily US large-cap stocks. Manager Fran Radano selects companies on the basis...
  • Fidelity China Special Situations
    20 April 2016
    Market moves creating opportunities
    Fidelity China Special Situations (FCSS) is a specialist actively managed fund investing in Chinese equities. The manager focuses on sectors set to benefit...
  • Tiso Blackstar Group
    20 April 2016
    Moving to become a single-sector investor
    Tiso Blackstar Group (TBGR) announced that it intends to focus solely on the media sector in future and dispose of all its non-media assets, almost half...
  • Scottish Oriental Smaller Companies
    14 April 2016
    Exposure to quality Asian small-cap stocks
    Scottish Oriental Smaller Companies Trust (SST) is a well-established Asian trust investing in small-cap companies in the region, excluding Japan and Australasia....
  • Henderson Global Trust
    31 March 2016
    Proposed rollover with choice of strategies
    On 1 February 2016 the directors of Henderson Global Trust (HGL) announced that they had agreed in principle to combine the trust with stablemate Henderson...
  • Golden Prospect Precious Metals
    29 March 2016
    Termination of coverage
    Edison Investment Research is terminating coverage on Golden Prospect Precious Metals (GPM). Please note you should no longer rely on any previous research...
© 2016 Edison Investment Research.

View more research papers »

Today's Best Bank Rates
RaboDirect 3.25  
RaboDirect 3.25  
Based on a $50,000 deposit
More Rates »
Cash PIE Rates

Cash Funds

Institution Rate 33% 39%
ANZ 0.75    -    -
ASB Bank 1.40    -    -
ASB Bank 1.45    -    -
ASB Bank 1.50    -    -
ASB Bank 1.55    0.18    -
ASB Bank 1.60    -    -
BNZ 0.75    -    -
Heartland Bank 2.60    3.22    3.37
Kiwibank 1.50    1.55    1.62
Kiwibank 2.50    2.59    2.70
Nelson Building Society 3.75    3.90    4.08
RaboDirect 2.00    2.07    2.17
SBS Bank 1.80    2.59    2.70
TSB Bank 2.20    2.28    2.38
Westpac 1.00    1.03    1.07
Westpac 0.05    0.10    0.11
Westpac 2.75    2.83    2.96

Term Funds

Institution Rate 33% 39%
ANZ Term Fund - 90 days 2.60    3.01    3.14
ANZ Term fund - 12 months 3.25    3.64    3.80
ANZ Term Fund - 120 days 3.00    3.29    3.45
ANZ Term fund - 6 months 3.15    3.48    3.64
ANZ Term Fund - 150 days 3.00    3.39    3.55
ANZ Term Fund - 9 months 3.30    3.53    3.69
ANZ Term Fund - 18 months 3.30    3.64    3.80
ANZ Term Fund - 2 years 3.35    3.69    3.85
ANZ Term Fund - 5 years 3.60    3.85    4.02
ASB Bank Term Fund - 90 days 2.90    2.97    3.10
ASB Bank Term Fund - 6 months 3.40    3.49    3.65
ASB Bank Term Fund - 12 months 3.55    3.70    3.86
ASB Bank Term Fund - 18 months 3.60    3.75    3.92
ASB Bank Term Fund - 2 years 3.65    3.81    3.98
ASB Bank Term Fund - 5 years 3.80    3.97    4.14
ASB Bank Term Fund - 9 months 3.40    3.54    3.70
BNZ Term PIE - 120 days 3.00    3.29    3.43
BNZ Term PIE - 150 days 3.00    3.29    3.43
BNZ Term PIE - 5 years 3.70    -    -
BNZ Term PIE - 2 years 3.40    3.91    4.09
BNZ Term PIE - 18 months 3.35    3.86    4.04
BNZ Term PIE - 12 months 3.25    3.81    3.98
BNZ Term PIE - 9 months 3.25    -    -
BNZ Term PIE - 6 months 3.20    -    -
BNZ Term PIE - 90 days 2.60    -    -
Co-operative Bank PIE Term Fund - 6 months 4.00    4.11    4.30
Heartland Bank Term Deposit PIE - 12 months 3.40    3.79    3.96
Kiwibank Term Deposit Fund - 90 days 2.60    2.67    2.79
Kiwibank Term Deposit Fund - 6 months 3.10    3.19    3.33
Kiwibank Term Deposit Fund - 12 months 3.30    3.39    3.55
Kiwibank Term Deposit Fund - 150 days 3.25    3.34    3.49
Kiwibank Term Deposit Fund - 120 days 3.00    3.09    3.22
RaboDirect Term Advantage Fund - 12 months 3.45    3.55    3.71
RaboDirect Term Advantage Fund - 6 months 3.30    3.39    3.55
RaboDirect Term Advantage Fund - 90 days 2.85    2.93    3.06
Westpac Term PIE Fund - 150 days 2.80    3.08    3.22
Westpac Term PIE Fund - 120 days 3.25    3.13    3.27
Westpac Term PIE Fund - 18 months 3.35    3.58    3.75
Westpac Term PIE Fund - 12 months 3.35    3.58    3.75
Westpac Term PIE Fund - 6 months 3.25    3.38    3.53
Westpac Term PIE Fund - 9 months 3.20    3.44    3.60
Westpac Term PIE Fund - 90 days 2.60    2.82    2.95
Westpac Term PIE Fund - 2 years 3.40    3.85    4.02
About Us  |  Advertise  |  Contact Us  |  Terms & Conditions  |  Privacy Policy  |  RSS Feeds  |  Letters  |  Archive  |  Toolbox
 
Site by Web Developer and eyelovedesign.com