It's about the STATE not the COMPANIES...
This just released from S&P....
"The sovereign downgrade will not affect the ratings or stable rating outlooks on the six U.S.-domiciled highest-rated nonfinancial corporate issuers: Automatic Data Processing Inc. (ADP; AAA/Stable/A-1+), ExxonMobil Corp. (AAA/Stable/A-1+), Johnson & Johnson (AAA/Stable/A-1+), Microsoft Corp. (AAA/Stable/A-1+), General Electric Co. (AA+/Stable/A-1+), and W.W. Grainger Inc. (AA+/Stable/A-1+).
WHY THERE IS NO IMPACT ON OUR TOP-RATED U.S. INDUSTRIALS
According to Standard & Poor's criteria, ratings on a nonfinancial corporate borrower may exceed those on the sovereign if we expect the borrower to continue to fulfill its financial obligations, even in a sovereign default scenario. Depending on the industry sector or individual company's financial strength, a company may be better or less able to withstand macroeconomic shocks or other country-related risks. In considering corporate ratings vis-à-vis the sovereign rating, we consider how exposed a company would be to a typical sovereign stress scenario, which, in the past, has included: sharp currency movements, credit shortages, a weakened banking sector, higher government taxes and fees, late or partial payments from the public sector, a more difficult regulatory environment, economic contraction, and rising inflation and interest rates.
Corporate entities that we would typically consider to be most exposed to country risk include firms with mainly domestic customers, highly cyclical companies or companies for which profitability is highly correlated with the general condition of the economy, and companies with high exposures to government sector customers. Corporate entities that typically are least exposed to country risk include globally diversified companies and export-oriented companies. Local economic conditions have less of an effect on such companies, and they generally benefit from currency depreciation."
Excerpt!
source: S&P
No comments:
Post a Comment