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☆ UK's Thames Water's troubles mount as credit rating cut to junk
▼ + stars: | 2024-07-24 | by ( ) www.cnbc.com time to read: +1 min

Britain's largest water provider Thames Water suffered a blow in its battle to avoid renationalisation on Wednesday as credit rating firm Moody's downgraded its corporate family rating (CFR) and its safest tranche of debt to junk. Moody's downgraded Thames Water's CFR to Ba2 - two rungs into 'junk' rating territory - from Baa3, which is an investment grade and something water firms are supposed to maintain as part of their licence requirements. It safest tranche of debt known as senior secured "Class A" bonds were cut to Ba1, which is one notch into junk, while its riskier "Class B" bonds were dumped five notches lower at B3. Moody's said the downgrade followed this month's provisional ruling from British regulator Ofwat that Thames would not be allowed to raise prices as much as it had requested, and because of its "weakening liquidity position". "Almost certainly it will mean special administration for the company," Seaport credit analyst Satish Pulle said, adding that the downgrade had not come as a surprise.

Persons: Moody's, Satish Pulle Organizations: Thames, CFR, Seaport Locations: Ba2, Baa3, Thames

☆ NYCB shares continue tumble after Moody's downgrades bank's credit rating to junk
▼ + stars: | 2024-02-07 | by ( Hugh Son | ) www.cnbc.com time to read: +1 min

A sign is pictured above a branch of the New York Community Bank in Yonkers, New York, U.S., January 31, 2024. New York Community Bank' s shares continued their downward spiral Wednesday after Moody's Investors Service cut the firm's credit rating two notches to junk status. NYCB shares fell about 3%, trimming earlier losses of around 10%, in premarket trading. Late Tuesday evening, Moody's issued a report stating that NYCB faced "multi-faceted financial, risk-management and governance challenges." "In Moody's view, control functions with strong knowledge of a bank's risks are key to a bank's credit strength."

Persons: Moody's, NYCB Organizations: New York Community Bank, Moody's Locations: Yonkers , New York, U.S, Baa3

☆ Moody's cuts Egypt rating to B3, changes outlook to stable
▼ + stars: | 2023-02-07 | by ( ) www.reuters.com time to read: 1 min

Feb 7 (Reuters) - Ratings agency Moody's lowered Egypt's sovereign rating by one notch to B3 from B2 on Tuesday, citing the country's reduced external buffers and shock absorption capacity. The agency changed its outlook for Egypt to stable from negative. "Moody's does not expect Egypt's liquidity and external positions to rebound quickly", the agency said. The agency also lowered Egypt's local-currency ceilings to Ba3 from Ba2. Reporting by Vansh Agarwal in Bengaluru; Editing by Krishna Chandra EluriOur Standards: The Thomson Reuters Trust Principles.

[1/2] A Brazilian flag is seen through broken glass following the anti-democratic riots, at Planalto Palace, in Brasilia, Brazil, January 10, 2023. What many banks point to is the assumed risk premium already built in to Brazilian real interest rates. But beyond Brazilian markets, the wide global markets calm surrounding the weekend events was equally curious. After all, Brazil is the 12th largest economy in the world and one of the biggest food and raw materials exporters. Among the 10 biggest risks it lists by likelihood is emerging markets political risks that threaten political institutions.

☆ Coinbase debtholders sweat as bonds trade near 50 cents on the dollar following FTX collapse
▼ + stars: | 2022-12-13 | by ( Ari Levy | ) www.cnbc.com time to read: +3 min

Monitors display Coinbase signage during the company's initial public offering (IPO) at the Nasdaq MarketSite in New York, U.S., on Wednesday, April 14, 2021. For over a month, Coinbase notes set to mature in 2031 have been trading around 50 cents on the dollar, down from about 92 cents at the beginning of the year. The first tranche of bonds — $1.4 billion in convertible notes — don't mature until June 2026. But the company is projected by analysts to run up a $2.6 billion loss this year and another deficit of $1.4 billion in 2023, according to Refinitiv estimates. "The company is in a strong liquidity position, but at the same time they have to deal with a changing operating environment."

☆ How Elon Musk’s Twitter Faces Mountain of Debt, Falling Revenue and Surging Costs
▼ + stars: | 2022-11-21 | by ( Mark Maurer | ) www.wsj.com time to read: +10 min

Elon Musk says his $44 billion Twitter takeover might result in a bankruptcy filing. To make the deal work, Mr. Musk has been trying to add subscription revenue and reassure advertisers about the platform’s future. What’s more, the company’s debt stack now includes floating-rate debt, meaning that interest costs are set to rise as the Federal Reserve continues to increase interest rates. Twitter’s credit ratings, which were below investment grade before the transaction with Mr. Musk, have deteriorated further. For that, Mr. Musk would need to persuade potential investors that he has a viable long-term business plan, he said.

It isn’t clear yet who will succeed Mr. Segal as CFO. Twitter and Mr. Musk on Friday didn’t respond to requests for comment. Mr. Segal on Friday tweeted that “the work isn’t complete,” referring to Twitter’s ambition to build “the world’s townsquare.” Mr. Segal didn’t respond to a request for additional comment. Mr. Musk has said buying Twitter would accelerate his creation of an app that combines the capabilities of several apps in one. The future executives that Mr. Musk installs will have to share his vision for Twitter, Mr. Ives said, and prepare to support growth initiatives that will take years to build.

Typically, banks would sell the debt to investors and pocket an underwriting fee. Elon Musk vs TwitterThe debate, currently a topic of conversation among investment bankers and debt investors, provides a window into the havoc wreaked on Wall Street by Musk’s U-turn last week. Musk, however, conditioned his proposal on his ability to secure debt financing and now has until Oct. 28 to close on the transaction. VARIOUS OPTIONSThe debt financing package is comprised of leveraged loans, which are risky because of the amount of debt the company is taking on, as well as secured and unsecured bonds. In September, banks financing the Citrix buyout undertook a similar restructuring.

☆ Cheniere CFO Aims for Investment-Grade Credit Rating as Natural-Gas Prices Soar
▼ + stars: | 2022-09-15 | by ( Kristin Broughton | ) www.wsj.com time to read: +6 min

Cheniere Energy Inc.’s finance chief is working toward landing an investment-grade credit rating in the coming year, as the largest U.S. exporter of liquefied natural gas pays down debt and benefits from the run-up in energy prices. Photo: Cheniere Energy Inc. The company expects to reach investment grade next year based on its current rating and financial position, Mr. Davis said. An investment-grade rating would provide confidence to long-term investors and customers that the company can survive volatility in commodity markets, Mr. Davis said. Higher natural gas prices have been a boon to Cheniere’s finances, prompting it to accelerate plans to pay down debt.

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