The FASB Proposal's Emphasis On How Companies Manage Financial Instruments Could Improve Financial Reporting
We greatly support the FASB's objective to provide financial statement users with more decision-useful information about a company's financial instruments, while concurrently simplifying the accounting for those instruments. The accounting treatment of financial instruments should reflect the fundamental business and economic purpose for transacting those instruments, and provide useful information on the amounts likely to be realized or paid. The optimal depiction of financial instruments should consider a company's asset-liability management model and its business strategy. In some cases, fair value accounting would best achieve those objectives; in other cases, amortized cost treatment may provide a better representation. This Proposed Update, expected to create a single, comprehensive standard for measuring financial instruments such as loans, securities, hybrids, and deposits within its scope, could be a significant step forward in simplifying and improving the quality of financial reporting.
U.S. Weekly Financial Notes: Law Of Gravity
What goes up must come down. That's how it feels when we look at the housing starts data, which plunged by 16.5% in April after reaching a five-year high of 1.021 million units in March. Although this was weaker than expectations, the 14.3% bounce in permits to another five-year high suggests more building over the next few months and good news for GDP growth. The housing starts data disappointed in April, falling by 16.5% to 853,000 units. It was weaker than consensus expectations for 970,000 units started, though it came after March starts surged to levels not seen in five years. Given the large jump in March, multifamily starts plunged by 37.5% in April. However, single-family starts also declined, by 2.1% over March. The two months of declines come after single family reached a new four-year high in February.
Latest research
Is Information Technology Really Trending Riskier?
In the 500 years after Johannes Gutenberg invented the printing press in 1450, change came slowly to the world of information technology. But no more. Today, each new technology wipes out the value of innovations that were only a few years old. Cloud computing threatens to disrupt the disk storage industry, streaming is bullying broadcast television and DVDs, and handhelds are cannibalizing PC sales. Does this wave of rapid technological innovation point to a riskier sector? The industry's credit risk today is more likely vulnerable to general economic pressures than to innovation.
What Are Nontraditional Asset Securitizations?
Innovation and securitization go hand in hand. Indeed, securitization has evolved to its current state because it readily adapts to new asset types and structures. Alongside the mainstays of U.S. securitization asset classes--mortgages, consumer loans, and collateralized loan obligations (CLOs)--a group of smaller, less-prevalent, and often novel asset classes have thrived in the securitization market since the mid-1990s. We refer to these as nontraditional asset securitizations; other market participants also refer to them as esoteric assets or new assets. The assets backing these transactions often come from business sectors such as timeshare loans, shipping container leases, and structured settlements, which are narrow and small compared with the U.S. housing or auto markets. Investors appreciate the risk diversification that these assets typically provide and the securities’ relatively high yields.
The Scotts Miracle-Gro Co. 'BB+' Rating Affirmed, Outlook Revised To Negative On Operating Weakness
The outlook revision reflects that the company's financial risk profile has weakened as a result of continued tepid operating performance for the 12 months ended March 30, 2013, as average debt levels remained relatively stable. The company's leverage for the 12 months ended March 30, 2013, increased to about 4x, compared with 2.8x one year ago, and is on the high end of our indicative ratio of debt-to-EBITDA leverage of 3x to 4x for a "significant" financial risk profile. In particular, the company's operating performance for the recent quarter was hurt by a late start to the spring lawn and garden season, due to weather conditions. Credit metrics could remain weak for the current rating if the company does not recapture lost sales during the remainder of the lawn and garden season.
J.C. Penney Co. Inc. Ratings Unaffected By Announced First Quarter Results
The decline in comparable store sales of 16.6%, substantial margin erosion due to the increase in clearance merchandise, and cash burn of about $959 million was in line with our expectations of a weak first quarter. In addition, the capital raising activities undertaken by J.C. Penney in the first quarter, including the $850 million draw down under the revolving credit facility and $1.75 billion term loan, were also expected. We believe there will be further meaningful changes over the next few months as the company rebalances merchandise among its new shops, private label, and national brands. We expect the re-introduction of promotions and couponing will help drive traffic over the next few quarters.
Special Report: Africa Taps New Debt Market
May 2013
A special report from Standard & Poor's Services team of experts looking into what has brought on the change.
Credit Week Special Report: Global Economic Outlook
April 2013
Looking out into 2014, we expect the global economic expansion to gain a firmer footing as the recovery in the U.S. moves up a notch in strength
Special Report: The Gulf- Shelter From The Storm
April 2013
High oil prices are fostering growth in the Gulf region and insulating the economy and credit quality of rated issuers from the economic and political turbulence surrounding them.
Standard & Poor’s Global Aging Interactive Tools
March 2013
For the first time, S&P's Global Aging data is available via interactive tools on the Web and an iPad app that allow users to view the impact of aging on public finances.
South African Corporates
February 2013
A recent publication looking at credit trends in the South African corporate sector, focusing on 40 of the larger companies.
Top 10 Investor Questions For Global Corporates
January 2013
The fiscal cliff, eurozone economy, and China's growth top the list of investor questions for 2013 in this multimedia collection.
Global Oil & Gas Producers: Navigating Through A Dynamic Period
January 2013
Learn more about the global oil and gas industry in this multimedia collection.
An overview of newly published insurance criteria.
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