Key Takeaways
- EBITDA-to-interest ratios for most U.S. companies rated 'B-' suggest they will be resilient to Fed rate hikes in the near term, despite being heavily indebted.
- The pressure on free operating cash flow (FOCF) will be more acute for companies with higher capital spending requirements.
- The telecommunications, autos/trucks, and aerospace/defense sectors are at the highest risk, with the lowest FOCF-to-debt ratios. The oil and gas and metals and mining sectors had the strongest credit metrics, in part because they benefitted from higher commodity prices in 2021.
- Cost inflation is also slowing EBITDA growth, and we expect it to continue until a supply-and-demand balance is restored in the second half of 2022.
- Longer term, there are concerns about refinance risk and cash flow pressure, especially if the market reprices credit risk on top of the rise in benchmark interest rates.
Despite a volatile ride at the tail end of 2021, the U.S. leveraged finance market has broadly held firm with no significant disruptions. In this report, we spotlight EBITDA-to-interest and free operating cash flow (FOCF)-to-debt credit measures of 'B-' rated issuers in North America in an attempt to gauge their sensitivity to the Federal Reserve's rate hikes expected this year. Unlike higher-rated peers that utilize high-yield notes, 'B-' issuers heavily rely on floating-rate loans for external funding needs. Our analysis of 469 'B-' rated North American corporate entities indicates that despite being heavily indebted, most are resilient to rate hikes in the near term, judging by 93% having an EBITDA interest coverage ratio over 1.5x and with 70% over 2x.
Interest coverage measures can, however, overstate borrowers' financial flexibility because high capital spending lowers the cash flow available for debt servicing. Consequently, we also review FOCF to debt that often better reflects the cash flow in relation to financial obligations, especially for capital-intensive companies. The pool shows a weaker financial profile based on FOCF-to-debt ratios, with 63% having FOCF to debt below 5%. By sector, telecommunications and autos/trucks have the lowest FOCF-to-debt ratios suggesting they have less financial flexibility.
Near-Term Rate Hikes Not A Significant Threat To Interest Coverage, But FOCF-To-Debt Ratios Suggest Some Sectors Are More Vulnerable
The past decade was characterized mainly by extended periods of low interest rates and broad credit availability. In turn, corporate borrowers routinely used high levels of debt financing to support corporate actions, but low interest rates helped keep interest coverage metrics comfortable. Financial pressure from pending rate hikes is likely to be limited in the near term because many firms regularly refinance their debt to refresh liquidity, lower interest costs, and push out debt maturities.
Further, the impact on cash interest costs will be blunted because many loans have interest rate floors above current benchmark rates and/or have interest rate swaps in place. Still, higher interest rates are likely to eventually reduce cash flows, which could be problematic for firms with less financial flexibility due to high capital spending requirements. Longer term, the ability to refinance debt in a higher interest rate environment bears watching, especially if spreads increase due to the repricing of risk in a less benign credit environment.
Our study of 469 'B-' rated North American corporate entities shows a group risk profile of high indebtedness based on our calculated median debt-to-EBITDA ratio of 7.3x, 4.1% FOCF to debt, and 2.3x EBITDA interest coverage, with 78% of the entities owned by private equity sponsors. We calculated the medians of each credit measure (see charts 1 and 2) for each sector. The sectors in quadrant III of chart 1 and quadrant IV of chart 2 have a higher risk profile than that of the group average, while those in quadrant II of chart 1 and quadrant I of chart 2 are better positioned versus peers. The bubble size represents entity count, and vertical lines represent the group median.
Data Used In This Report
We use S&P Global Ratings-adjusted credit ratios instead of company reported ratios in this analysis. Adjusted credit metrics are used in our rating analysis; they consider both a historical and a forward-looking component of earnings, debt, and cash flow. When calculating the ratio, we generally emphasize forecast years instead of historical years.
A caveat for these metrics is that our base-case forecast is baked into our rating. A company could take further cash-preserving measures in response to the rising rates beyond our forecast, such as cost reduction initiatives, capital-spending cuts, asset sales, or credit line stretching, all of which could result in stronger metrics than considered in our analysis. However, taking these measures may be difficult for 'B-' companies given their weak standing in credit markets. Inflation, rising labor costs, and supply chain issues could also make cutting costs challenging.
Chart 1
Table 1
Sector Median EBITDA Interest Coverage And FOCF-To-Debt | ||||||||
---|---|---|---|---|---|---|---|---|
Org Group | Entity count | Median EBITDA interest coverage (x) | Median FOCF to debt (%) | |||||
Aerospace/Defense | 6 | 2.01 | 3.05 | |||||
Auto/Trucks | 12 | 2.14 | 2.91 | |||||
Business and Consumer Services | 53 | 2.46 | 3.98 | |||||
Cap Goods/Machine&Equip | 56 | 2.51 | 4.19 | |||||
Chemicals | 15 | 2.52 | 3.64 | |||||
Consumer Products | 37 | 2.26 | 4.05 | |||||
Forest Prod/Bldg Mat/Packaging | 17 | 2.58 | 3.45 | |||||
Healthcare | 65 | 2.06 | 3.32 | |||||
Media, Entertainment & Leisure | 59 | 2.07 | 4.44 | |||||
Mining & Minerals | 14 | 4.76 | 15.15 | |||||
Oil & Gas | 24 | 5.97 | 7.63 | |||||
Restaurants/Retailing | 25 | 2.26 | 4.78 | |||||
Technology | 57 | 2.18 | 4.45 | |||||
Telecommunications | 18 | 2.78 | 2.06 | |||||
Transportation | 9 | 2.60 | 3.40 | |||||
Median (Total) | 469 | 2.3 | 4.1 | |||||
FOCF--Free operating cash flow. |
Chart 2
Table 2
Sector Median EBITDA Interest Coverage And Leverage | |||
---|---|---|---|
Org group | Entity count | Median leverage (x) | Median EBITDA interest coverage (x) |
Aerospace/Defense | 6 | 7.67 | 2.01 |
Auto/Trucks | 12 | 7.26 | 2.14 |
Business and Consumer Services | 53 | 7.68 | 2.46 |
Cap Goods/Machine&Equip | 56 | 6.97 | 2.51 |
Chemicals | 15 | 6.77 | 2.52 |
Consumer Products | 37 | 7.29 | 2.26 |
Forest Prod/Bldg Mat/Packaging | 17 | 6.90 | 2.58 |
Healthcare | 65 | 7.97 | 2.06 |
Media, Entertainment & Leisure | 59 | 7.49 | 2.07 |
Mining & Minerals | 14 | 3.90 | 4.76 |
Oil & Gas | 24 | 2.36 | 5.97 |
Restaurants/Retailing | 25 | 6.89 | 2.26 |
Technology | 57 | 8.62 | 2.18 |
Telecommunications | 18 | 5.84 | 2.78 |
Transportation | 9 | 6.71 | 2.60 |
Median (Total) | 469 | 7.3 | 2.3 |
Higher-risk cluster. Autos/trucks, aerospace/defense, and the health care sector landed in the high-risk quadrant, with FOCF-to-debt ratios among the lowest in the group. Pulling down the median for autos/trucks is a small set of auto suppliers with low or negative FOCF. This includes Aludyne Inc. and Cooper-Standard Holdings Inc., both of which have been hit by lower original equipment manufacturer (OEM) production and inflationary increase in raw material costs. We anticipate both companies' FOCF to be slightly negative this year.
Telecommunications and cable companies lagged behind others on FOCF to debt by a large margin. This is largely because of their high capital spending, such as hefty investments in network rollouts and upgrades. The pandemic has shown the importance of high-speed connectivity. We expect capital expenditure to remain high in 2022 as more companies support fiber and 5G rollout. The sector's weak FOCF is offset by relatively low leverage and healthier EBITDA interest coverage. Telecom is also among the sectors least disrupted by the pandemic.
Health care ranks near the bottom on all three measures. The potential impact could be significant as health care companies make up 14% of all the 'B-' companies, ahead of media, entertainment, and leisure (13%) and the technology sector (12%). Following a successful rollout of the vaccination program, all health care subsectors largely recovered by the end of 2021. That said, a high proportion of health care equipment companies have FOCF to debt below 2%, which is less than half of the group median of 4.1%. Excluding this subsector would increase the median to 3.4%, more in line with other industries. On the other hand, health care software and service providers are the most indebted with median leverage of 8.3x.
Technology tops the list as the most indebted sector. The sector has long benefited from the interest of private equity firms and strategic acquirers. Lenders are less cautious about tech companies' leverage levels because their business models are often cited for their predictable and sustainable revenue. Last year was a record-crushing year for mergers and acquisition (M&A)-related loan issuance, and tech companies were the largest contributor, making up 18% of new loans by count, according to Leveraged Commentary & Data (LCD). We expect more to follow in 2022.
Higher-cushion cluster. The oil and gas and metals and mining sectors had the strongest credit metrics, in part because they benefitted from higher commodity prices in 2021. The oil and gas sector's first-place ranking also reflects conservative financial policies. Producers in North America remain focused on generating free cash flow to meet investor demands to pay down debt and to return capital. In addition, most M&A transactions last year were funded through equity instead of incremental debt, indicating financial discipline. We expect oil and natural gas prices to remain supportive in 2022.
Similarly, metals and mining companies have focused on improving returns for the past three to five years, which support credit quality. Record low interest rates and a weaker U.S. dollar last year have also benefitted the prices of metals. We believe profits will remain strong in 2022 even though we assume prices will soften.
Most vulnerable. Of the 469 'B-' rated companies, we identified six with negative FOCF, concerningly high leverage at above 7x, and a negative rating outlook, though all have adequate liquidity. These companies make up only 1.3% of the 'B-' population by count; and the combined $4.3 billion of first-lien term loans held by these companies is equally insignificant in the context of the $1.35 trillion leveraged loan market (par amount outstanding tracked by S&P/LSTA Leveraged Loan Index).
Liquidity. An overwhelming majority of our 'B-' issuers have adequate liquidity. Those with weak and less than adequate liquidity make up only 2%. Liquidity levels result from easy financing conditions and, equally important, a steady desire from management teams to build a healthy liquidity buffer. Since the pandemic's trough, most companies have actively managed their balance sheets to maintain flexibility to weather down cycles. To achieve this, companies built up their cash reserve from various sources last year, including debt refinancings and extensions, initial public offerings, asset sales, and equity offerings. Further, we assess a company's debt maturity profile with its liquidity and potential funding availability. Weighted debt maturity, which measures the weighted average maturity of bank debt and debt securities (i.e., hybrid debt) within a capital structure, averages 4.8 years across the pool, signaling a relatively modest refinancing risk in 2022.
Private equity sponsor ownership. Financial sponsor-owned issuers make up more than three quarters (78%) of the total, and leverage exceeds 7x for 86% of this group. We generally expect private equity-owned issuers to have a highly leveraged financial risk profile. In our study pool, sponsor-owned issuers have median leverage as high as 7.4x. According to LCD, sponsored issuers accounted for 85% of the total institutional loans for dividend recap in 2021.
Steady Post-Pandemic Deleveraging
For a sample of speculative-grade-rated corporate borrowers, we tracked the transition of last-12-month (LTM) EBITDA, gross debt, and leverage for the 12-month periods ended between Sept. 30, 2019, and Sept. 30, 2021. Some noteworthy trends emerged in the third-quarter financials:
- EBITDA growth continued to outpace debt growth in third-quarter 2021, pushing median LTM leverage to a record low of 5.3x since the start of the pandemic (see table 3). This tied with the year-end 2019 level and is only slightly above 5.2x in third-quarter 2019. The continuing improvement in leverage coincided with positive rating trends in 2021. Through September 2021, speculative-grade upgrades outpaced downgrades by roughly 2.9 to 1 in the U.S. Every sector saw more upgrades than downgrades.
- Of the 16 sectors, leverage in 13 improved in the third quarter of 2021 versus the previous quarter, led by oil and gas, which has been a bright spot recently given a strong recovery in demand and disciplined capital spending. The sector reduced leverage to 3.1x from 4.2x in the midyear reading.
- While leverage for the media, entertainment, and leisure sector declined more than three turns in the Q1-Q3 period of 2021, it remains significantly higher than its pre-pandemic level, as is that of the transportation sector. As expected, both sectors were hammered when health protocols and travel restrictions were reintroduced late last year in response to the omicron variant. Of the media, entertainment, and leisure companies, 14% still reported negative LTM EBITDA for third-quarter 2021, while the share was 12% for transportation. By way of comparison, at the trough, about one-third (36%) of the transportation companies (i.e., airlines, railroads, trucking, air freight, and logistics) reported a LTM EBITDA deficit, and none was in the red before the pandemic.
- Telecoms have avoided much of the pandemic distress thus far; the cumulative effect of the pandemic on sector leverage is one of the least significant among the group, having increased by less than half a turn within our observation period.
- From a rating perspective, third-quarter 2021 saw continuing delevering trends across all rating categories (see table 2). Median LTM leverage has more than recovered in the 'BB' category. In contrast, leverage of 'B-' is now half a turn above its 2019 level of 7.6x, which is already historically high.
- The 'CCC' category ('CCC+'/'CCC'/'CCC-') has had the largest credit deterioration. While the number of 'CCC' category-rated companies in the U.S. and Canada has declined to a 21-month low, the remaining ones are facing crushing debt loads and depressed earnings. The gap between this segment and the higher-rated entities has widened significantly over the pandemic.
Data Used In This Report
Our large data set contains all speculative-grade corporate entities that we rate in the U.S. and Canada, covering both public and private companies. Each quarter, we construct a sample pool from the large set where we have quarter-end reported financials for every quarter since Sept. 30, 2018. This sample set varies somewhat quarter by quarter as it excludes entities rated 'SD' (selective default) or no longer outstanding as of each quarter-end (either due to default or being withdrawn) but includes new issuers where we have historical financials over the study period window. The sample set is generally smaller than the large set but is nonetheless a representative sample of the North American speculate-grade universe.
This latest sample consists of 1,083 companies as some private companies have yet to report third-quarter 2021 financials before our extraction date of Dec. 23, 2021. These companies will re-enter the sample when we have all the financials when we build the next sample.
Leverage in this analysis is calculated as gross debt over EBITDA, both as reported in companies' financial statements and without adjustment by S&P Global Ratings. They should provide useful insight into the leverage trends, even if they differ from the calculated ratios used in our rating analysis.
Table 3
Median Gross Leverage By Rating Category | ||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Median gross leverage (x) | ||||||||||||||||||||||
Issuer credit rating* | Entity count | 2019Q3 LTM | 2019 | 2020Q1 LTM | 2020Q2 LTM | 2020Q3 LTM | 2020 | 2021Q1 LTM | 2021Q2 LTM | 2021Q3 LTM | ||||||||||||
BB+ | 111 | 3.18 | 3.20 | 3.36 | 3.68 | 3.45 | 3.25 | 3.10 | 3.00 | 2.89 | ||||||||||||
BB | 121 | 3.25 | 3.30 | 3.45 | 4.02 | 3.92 | 3.74 | 3.74 | 3.20 | 3.05 | ||||||||||||
BB- | 98 | 3.67 | 3.73 | 4.00 | 4.53 | 4.28 | 3.58 | 3.25 | 2.98 | 2.65 | ||||||||||||
B+ | 144 | 4.76 | 4.81 | 5.24 | 5.60 | 5.24 | 5.28 | 5.04 | 4.52 | 4.36 | ||||||||||||
B | 232 | 5.38 | 5.54 | 6.27 | 6.70 | 6.44 | 6.50 | 6.22 | 5.75 | 5.69 | ||||||||||||
B- | 263 | 7.66 | 7.59 | 8.30 | 8.91 | 8.52 | 9.39 | 8.91 | 8.22 | 8.13 | ||||||||||||
CCC+ | 82 | 8.30 | 8.64 | 9.45 | 13.95 | 14.70 | 15.11 | 16.05 | 12.87 | 12.21 | ||||||||||||
CCC | 28 | 13.28 | 11.39 | 15.09 | 40.02 | 63.09 | N.M.** | N.M. | N.M. | 53.19 | ||||||||||||
CCC- | 4 | 6.85 | 8.14 | 10.65 | 17.54 | 17.30 | 23.39 | 25.44 | 18.28 | 16.00 | ||||||||||||
CC | 0 | |||||||||||||||||||||
Total | 1,083 | 5.23 | 5.25 | 5.88 | 6.54 | 6.39 | 6.33 | 6.10 | 5.44 | 5.34 | ||||||||||||
Note: Leverage is calculated as reported gross debt over reported EBITDA, without adjustment by S&P Global Ratings. The sample in this study is rebalanced each quarter following selection criteria, as detailed in the "Data Used in This Report" section. *Rating as of Dec. 23, 2021. **Not meaningful due to negative EBITDA affecting the median leverage. LTM--Last 12 months. N.M.--Not meaningful. Source: S&P Global Ratings. |
Table 4
Median Gross Leverage By Industry | ||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Median gross leverage (x) | ||||||||||||||||||||||
Industry | Entity count | 2019Q3 LTM | 2019 | 2020Q1 LTM | 2020Q2 LTM | 2020Q3 LTM | 2020 | 2021Q1 LTM | 2021Q2 LTM | 2021Q3 LTM | ||||||||||||
Better: Improved or deleveraged compared to year-end 2019 levels | ||||||||||||||||||||||
Cap Goods/Machine&Equip | 116 | 5.94 | 5.94 | 6.26 | 6.15 | 6.09 | 5.34 | 5.88 | 5.47 | 5.42 | ||||||||||||
Chemicals | 35 | 5.15 | 5.33 | 5.53 | 6.60 | 6.79 | 5.34 | 4.65 | 3.98 | 3.83 | ||||||||||||
Forest Prod/Bldg Mat/Packaging | 48 | 4.43 | 4.30 | 4.48 | 3.95 | 4.04 | 4.04 | 4.09 | 4.11 | 3.78 | ||||||||||||
Mining & Minerals | 45 | 2.98 | 2.78 | 3.22 | 4.20 | 3.62 | 4.18 | 3.70 | 2.90 | 2.35 | ||||||||||||
Restaurants/Retailing | 82 | 4.81 | 4.59 | 5.08 | 6.50 | 5.69 | 5.56 | 5.07 | 4.23 | 3.98 | ||||||||||||
Real Estate | 29 | 6.91 | 6.91 | 7.95 | 7.69 | 7.98 | 7.76 | 6.48 | 6.75 | 6.55 | ||||||||||||
Technology | 93 | 6.93 | 7.47 | 7.01 | 7.27 | 6.65 | 6.42 | 6.62 | 6.92 | 6.61 | ||||||||||||
Telecommunications | 42 | 4.47 | 4.84 | 4.74 | 4.63 | 4.62 | 4.57 | 4.63 | 4.78 | 4.52 | ||||||||||||
Worse: Leverage increased from year-end 2019 | ||||||||||||||||||||||
Aerospace/Defense | 32 | 3.58 | 4.09 | 4.40 | 5.78 | 5.40 | 5.54 | 5.99 | 5.95 | 5.44 | ||||||||||||
Media, Entertainment & Leisure | 145 | 5.21 | 5.03 | 6.22 | 8.72 | 8.77 | 9.13 | 9.27 | 6.99 | 6.07 | ||||||||||||
Transportation | 25 | 3.61 | 4.53 | 4.56 | 7.68 | 10.34 | 10.07 | 10.30 | 7.41 | 6.64 | ||||||||||||
Leverage remained relatively flat or has returned to 2019 levels | ||||||||||||||||||||||
Auto/Trucks | 36 | 3.84 | 3.92 | 4.55 | 7.33 | 6.29 | 5.67 | 5.55 | 4.09 | 4.09 | ||||||||||||
Business and Consumer Servs | 91 | 7.31 | 7.16 | 7.33 | 7.86 | 8.19 | 7.87 | 7.48 | 7.41 | 7.10 | ||||||||||||
Consumer Products | 106 | 5.75 | 5.96 | 6.32 | 6.39 | 6.00 | 6.25 | 5.33 | 5.73 | 6.07 | ||||||||||||
Healthcare | 90 | 6.67 | 6.73 | 7.42 | 7.96 | 7.14 | 7.88 | 7.13 | 6.31 | 6.59 | ||||||||||||
Oil & Gas | 68 | 2.51 | 2.88 | 3.00 | 4.21 | 5.31 | 5.13 | 5.60 | 4.19 | 3.08 | ||||||||||||
Total | 1,083 | 5.23 | 5.25 | 5.88 | 6.54 | 6.39 | 6.33 | 6.10 | 5.44 | 5.34 | ||||||||||||
Note: Leverage is calculated as reported gross debt over reported EBITDA, without adjustment by S&P Global Ratings. The sample in this study is rebalanced each quarter following selection criteria, as detailed in the "Data Used in This Report" section. LTM--Last 12 months. Source: S&P Global Ratings. |
EBITDA Growth Is Decelerating
Median LTM debt rose 2% quarter over quarter in third-quarter 2021, outpaced by EBITDA, which surged 9% quarter over quarter (see chart 3).
EBITDA had been growing since late 2020, but the newest cohort suggests a loss of momentum. Two-thirds of companies in the sample saw a gain in EBITDA in the third quarter, whereas it was nearly 80% in the prior quarter. Early margin expansions centered on borrowers' cost-cutting measures, offset by raw materials, labor, and freight costs that are ratcheting up quickly amid supply-chain disruptions and labor shortages. In fact, profit margin pressures have started to show in the third-quarter financial reports: The gain in LTM EBITDA fell the most sharply in the consumer products sector, where an inability to offset inflation with pricing actions or productivity initiatives hurt profitability. We expect cost inflation to continue until a supply-and-demand balance is restored in the second half of 2022. Elevated inflation could subdue consumer demand and help restore this balance.
Chart 3
First-Lien New-Issue Recovery Inched Closer To 66% Five-Year Average
The chart below illustrates quarterly trends for our recovery expectations for first-lien new issues, measured by the average recovery point estimates of our recovery ratings. Average recovery point estimates have hovered around the low- to mid-60% recently, with the last quarter of 2021 continuing this trend. Fourth-quarter 2021 was the least active quarter of the year and saw a marginal improvement.
New-issue recovery expectations vary quarterly based on supply-demand dynamics and the mix of issuer credit quality during the period. The presence of 'BB' category rated issuers in the fourth quarter decreased to 17% from 21% in the prior quarter, with an average expected recovery of 74%, ranging widely from 45% ('4' recovery rating on the senior secured credit facility at Travel + Leisure Co.) to 100% ('1+' recovery rating on the secured debt of Pacific Gas & Electric Co.). In comparison, about 80% of new first liens were issued by 'B' category rated issuers, of which corporate borrowers issued about one-third with 7x-plus leverage (based on our calculated leverage).
The strong demand for floating-rate loans is keeping loan markets accommodative. Aggressive structures such as high leverage generally result in less promising recovery prospects because recovery expectations fluctuate inversely with debt leverage (which often reflects shifts in investor risk tolerance). Furthermore, we saw M&A-driven incremental borrowings increasingly weakening recovery prospects given rich valuations and synergies yet to be achieved. That said, the magnitude of quarterly swings of average recoveries has been fairly rangebound over the past five years and may not deviate significantly from prior-year levels.
Chart 4
Chart 5 shows the recovery rating mix. First-lien recovery ratings are relatively clustered around '3' (50%-70% recovery estimated in a payment default), with about 62% of new issuance by count in fourth-quarter 2021 falling into this category. A much smaller share (34%) of new issues was expected to recover 70% or more, which is substantially lower than expected based on historical norms with average recoveries for first-lien debt of 70% or higher. The expectation for substantial and very high recoveries is now confined to a smaller group of companies with a meaningful cushion of junior debt in the capital structure.
Chart 5
Related Research
- Industry Top Trends 2022: Telecommunications, Jan. 25, 2022
- Industry Top Trends 2022: Oil and Gas, Jan. 25, 2022
- Industry Top Trends 2022: Metals and Mining, Jan. 25, 2022
- Industry Top Trends 2022: Healthcare, Jan. 25, 2022
- Global Credit Outlook 2022: Aftershocks, Future Shocks, And Transitions, Nov. 30, 2021
- U.S. Leveraged Finance Q3 2021 Update: Leverage Is Getting Better (Almost) All The Time, Oct. 21, 2021
This report does not constitute a rating action.
Primary Credit Analyst: | Hanna Zhang, New York + 1 (212) 438 8288; Hanna.Zhang@spglobal.com |
Secondary Contacts: | Steve H Wilkinson, CFA, New York + 1 (212) 438 5093; steve.wilkinson@spglobal.com |
Minesh Patel, CFA, New York + 1 (212) 438 6410; minesh.patel@spglobal.com | |
Analytical Manager: | Ramki Muthukrishnan, New York + 1 (212) 438 1384; ramki.muthukrishnan@spglobal.com |
Research Contributor: | Maulik Shah, CRISIL Global Analytical Center, an S&P affiliate, Mumbai |
No content (including ratings, credit-related analyses and data, valuations, model, software, or other application or output therefrom) or any part thereof (Content) may be modified, reverse engineered, reproduced, or distributed in any form by any means, or stored in a database or retrieval system, without the prior written permission of Standard & Poor’s Financial Services LLC or its affiliates (collectively, S&P). The Content shall not be used for any unlawful or unauthorized purposes. S&P and any third-party providers, as well as their directors, officers, shareholders, employees, or agents (collectively S&P Parties) do not guarantee the accuracy, completeness, timeliness, or availability of the Content. S&P Parties are not responsible for any errors or omissions (negligent or otherwise), regardless of the cause, for the results obtained from the use of the Content, or for the security or maintenance of any data input by the user. The Content is provided on an “as is” basis. S&P PARTIES DISCLAIM ANY AND ALL EXPRESS OR IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE, FREEDOM FROM BUGS, SOFTWARE ERRORS OR DEFECTS, THAT THE CONTENT’S FUNCTIONING WILL BE UNINTERRUPTED, OR THAT THE CONTENT WILL OPERATE WITH ANY SOFTWARE OR HARDWARE CONFIGURATION. In no event shall S&P Parties be liable to any party for any direct, indirect, incidental, exemplary, compensatory, punitive, special or consequential damages, costs, expenses, legal fees, or losses (including, without limitation, lost income or lost profits and opportunity costs or losses caused by negligence) in connection with any use of the Content even if advised of the possibility of such damages.
Credit-related and other analyses, including ratings, and statements in the Content are statements of opinion as of the date they are expressed and not statements of fact. S&P’s opinions, analyses, and rating acknowledgment decisions (described below) are not recommendations to purchase, hold, or sell any securities or to make any investment decisions, and do not address the suitability of any security. S&P assumes no obligation to update the Content following publication in any form or format. The Content should not be relied on and is not a substitute for the skill, judgment, and experience of the user, its management, employees, advisors, and/or clients when making investment and other business decisions. S&P does not act as a fiduciary or an investment advisor except where registered as such. While S&P has obtained information from sources it believes to be reliable, S&P does not perform an audit and undertakes no duty of due diligence or independent verification of any information it receives. Rating-related publications may be published for a variety of reasons that are not necessarily dependent on action by rating committees, including, but not limited to, the publication of a periodic update on a credit rating and related analyses.
To the extent that regulatory authorities allow a rating agency to acknowledge in one jurisdiction a rating issued in another jurisdiction for certain regulatory purposes, S&P reserves the right to assign, withdraw, or suspend such acknowledgement at any time and in its sole discretion. S&P Parties disclaim any duty whatsoever arising out of the assignment, withdrawal, or suspension of an acknowledgment as well as any liability for any damage alleged to have been suffered on account thereof.
S&P keeps certain activities of its business units separate from each other in order to preserve the independence and objectivity of their respective activities. As a result, certain business units of S&P may have information that is not available to other S&P business units. S&P has established policies and procedures to maintain the confidentiality of certain nonpublic information received in connection with each analytical process.
S&P may receive compensation for its ratings and certain analyses, normally from issuers or underwriters of securities or from obligors. S&P reserves the right to disseminate its opinions and analyses. S&P's public ratings and analyses are made available on its Web sites, www.spglobal.com/ratings (free of charge), and www.ratingsdirect.com (subscription), and may be distributed through other means, including via S&P publications and third-party redistributors. Additional information about our ratings fees is available at www.spglobal.com/usratingsfees.