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Saudi Aramco Posts Strong Cash Flows, Boosting M&A Prospects

Saudi Aramco's strong cash flow generation and its net cash position could support further acquisitions.

EMEA Rated REITs' Limited Exposure to WeWork-type Flexi-Offices

European office property companies that we rate have a low exposure to WeWork or other specialised flexi-office providers.

Fitch Ratings Revises Global Fertiliser Price Assumptions

Fitch Ratings' fertiliser pricing assumptions have been revised, reflecting underlying market dynamics, but we do not expect any rating changes as a result of these revisions. 

New Rules to Limit Chinese Corporates and LGFVs' Offshore Issuance

The Chinese regulator's recent changes in rules for offshore bond issuance by homebuilders and LGFVs are likely to keep Chinese corporate annual issuance flat in 2019, and will effectively cap it at this level in 2020.

RelatedNew Rules to Limit Chinese Corporates' Offshore Issuance

NBFI Funding Squeeze to Hit Indian Property Developers Hardest

NBFIs are now also shying away from refinancing maturing debt of even large, proven developers to limit concentration risk to the sector. This is pushing developers towards alternative funding channels, such as private equity.

Margins Narrow for Indian Steelmakers in 1QFY20, Raising Credit Risks

We anticipated a margin squeeze this year, but the weakness in domestic demand and the impact on sales volume were greater than expected. Further margin erosion and persistent weakness in demand could have rating implications as the rating headroom for these companies in terms of debt-to-EBITDA leverage is limited.

Korean Telcos to Accelerate Capex on Fast 5G Uptake

We expect 5G penetration to revive wireless revenue growth in the short term. Both SK Telecom Co., Ltd (A-/Negative) and KT Corporation (A/Stable) achieved a turnaround in wireless revenue growth in 2Q19 after several quarters of decline caused by government-driven tariff cuts in 2017.

Chinese Steel Production to Drop After Rising to Record in 1H19

We expect steel production to decline in 2H19 due to three factors - a slowdown in housing construction, production restrictions led by environmental measures and market-driven production cuts on shrinking steelmaker margins.

China's Renewable Capacity Additions Recover after Policy Changes

New solar installation recovered in 2Q19 from the previous quarter, as solar projects approved in 2018 were required to start operations before July 2019 to qualify for higher feed-in tariff. Wind capacity additions, which were 58% higher in 2Q19 than a year earlier, are likely to maintain growth throughout the year.

Additional Tariffs Raise Domestic Sales Risks on Indonesian Garment and Textile Sector

An Indonesia textile manufacturer focused on domestic sales - PT Delta Merlin Dunia Textiles (DMDT, CCC-) - said in July 2019 that it is facing financial difficulties due to increased competition from an influx of Chinese-made fabrics into the domestic market, among other reasons.

APLN's and DMDT's Financial Woes Not Indicative of HY Indonesian Liquidity Issues

Fitch Ratings believes the financial difficulties facing PT Agung Podomoro Land Tbk (APLN) and PT Delta Merlin Dunia Textile (DMDT) are not indicative of systemic liquidity challenges among the agency's rated portfolio of high-yield Indonesian corporates.

New Rules to Limit Chinese Corporates' Offshore Issuance

In a move which aims to control the potential systemic risk caused by excessive leverage, the National Development and Reform Commission (NDRC), the Chinese macroeconomic management agency, has limited the use of proceeds from new issuance for homebuilders and LGFVs that are "local state-owned enterprises undertaking financing tasks for local governments".

 

Related Report:
China Corporate Funding, Liquidity and Defaults - July 2019

Chinese Infrastructure Growth May Rise on Looser Measures for Special Bond Issuance

China reported a weaker set of economic data in 2Q19 despite the earlier easing measures. GDP slowed to 6.2% in 2Q19, the slowest pace since 1992, as demand faltered due to the US trade pressure. Total fixed-asset investment (FAI) grew by 5.8% yoy in 1H19, moderating from 6.3% in 1Q19.

 

Related Report:
China Fixed Asset Investment Quarterly Watch - 2Q19

Korean Automakers' SUV Focus May Mitigate Operating Challenges

The earnings of Korean automakers are likely to continue improving in 2019 due to favourable foreign-currency exchange rates and better product mix, with the ratings of Hyundai Motor Company (HMC, BBB+/Stable) and Kia Motors Corporation (BBB+/Stable) supported by solid financial profiles and strong liquidity.

Webinar

Insights on Bright Scholar Education's First-Time Ratings of 'BB-'

Date: July 23, 2019
Time: 15:00 (Hong Kong Time)

 

Fitch Ratings has published Bright Scholar Education Holdings Limited Long-Term Issuer Default Rating (IDR) of 'BB-' and senior unsecured rating of 'BB-'. The Outlook on the Long-Term IDR is Stable. Please join Fitch Ratings as we discuss key rating drivers and credit profile of Bright Scholar Education.

Register Now

 

Related Press Release:
Fitch Publishes Bright Scholar Education's First-Time 'BB-' Rating; Rates Bonds 'BB-(EXP)'

Turkey Downgrade Drives Corporate Actions, Highlights FX Risks

The downgrade of Turkey to 'BB-' from 'BB' with a Negative Outlook reflects, among other factors, the dismissal of the central bank governor Murat Cetinkaya, which has heightened doubts over the authorities' tolerance for a period of sustained below-trend growth and disinflation. We now forecast a somewhat faster cut in the Turkish policy rate to 18% at end-2019 (compared to a previous forecast of 20%) and further currency depreciation.

Webinar on Demand

Corporate Trends in Chile

Fitch Ratings hosted a webinar with Rina Jarufe and Joe Bormann in the Latin America Corporate Ratings group. Rina and Joe provided an overview on cross-border Chilean corporates. Listen Now

China's Hybrid Proposal May Further Japanese Carmakers' Lead

A potential change in China's auto market regulation that re-classifies hybrid vehicles (HV) as low fuel consumption vehicles might increase global automakers' HV sales in China but Toyota and Honda would likely have a competitive advantage due to their leading positions in the hybrid segment.

Stronger Consumer Brands, Retailers to Outperform in China's Challenging Market

China's retail sales grew 8.4% yoy in 1H19, slowing from 9% for the full year 2018, amid internal and external headwinds. Fitch expects certain segments of the consumer and retail market to show resilience despite the slowdown.

Webinar on Demand

Colombian Corporate Trends under Duque’s Administration

Fitch Ratings hosted a webcast with Natalia O’Byrne and Joe Bormann, in the Latin America Corporate Ratings Group, to discuss the trends in Colombian corporates under Duque’s administration. Topics of discussion include Fitch’s rating outlook, credit strengths and concerns in the sector.  Listen Now

Webinar on Demand

Outlook for the Diversified Industrials and Capital Goods sector (EMEA)

Fitch Ratings would like to invite you to listen to a webinar discussing our outlook for the investment-grade Diversified Industrials and Capital Goods sector in EMEA. This webinar follows the publication of a special report on this sector, available to all webcast registrants.  
Listen Now

Webinar

Higher Tariffs May Weaken Margins and Credit Metrics in U.S. Building Products

he increase in tariffs on Chinese imports could negatively affect margins for U.S. building product manufacturers. The ability to offset the incremental cost with additional pricing will depend in part on the product category, distribution channel and strength of the U.S. housing market. Listen Now

Webinar on Demand

Fitch on Oil & Gas

Please join Dmitry Marinchenko, Senior Director and lead analyst on EMEA Oil & Gas, for a discussion on the credit impact of the latest OPEC+ decision. This webinar also covers Fitch’s views on aggregate oil demand, US shale’s role in the global supply dynamics, and recent developments in European natural gas.  
Listen Now

European Telecoms' Competitive Intensity Evolving With Regulation

In a new presentation that competitive intensity in each European telecoms market is likely to be impacted as government and national regulators find the right balance between investment incentives and market-driven pricing.
 

Related Webinar:
European Telecoms: Competition in an Evolving Regulatory Environment

China Passenger Vehicles Sales Likely to Decline in 2019

China's passenger vehicle (PV) unit sales are likely to decline by low-single-digits in 2019. We lowered our forecast after year-to-date market performance trailed our previous forecast of roughly flat growth in 2019.

Report:
China Auto Dashboard: 2H19 Outlook

Related Articles:
China's EV Market to Sustain Rapid Growth Despite Subsidy Cuts
BMW, Daimler Most at Risk of US Tariff Rise, China Reprisal
Prolonged Chinese Auto Market Slowdown Could Affect Ratings
China VAT Cuts May Ignite Price War, Divergence in Auto Market

Webinar on Demand

Global Fertiliser Sector Outlook

Please join to a Fitch Ratings and CRU Group’s webinar on the latest developments and credit fundamentals of the global fertiliser industry. This follows the recent expansion of Fitch and CRU’s strategic agreement to incorporate CRU’s leading analysis, cost curves, and forecasting for the fertiliser sector into Fitch’s independent research and credit analytics. Listen Now

Related Article:
Fitch and CRU Group Expand Strategic Agreement to Incorporate Fertilizer Analysis

Factors Driving State Support in Corporate GRE Ratings in Asia

Fitch looks at four key factors to assess the likelihood of a Government-Related Entity receiving support from government, including the strength of linkage factors and incentive to support factors. The 58 rated GREs are from nine countries across industries.

 

Related Press Release and Report:
Factors Driving State Support in Corporate GRE Ratings in Asia
Considerations Behind Fitch's Analytical Approach to Rating Corporate Government-Related Entities (GREs) in Asia

Webinar on Demand

Fitch on UK Water: Pressure on Credit Quality Persists

Please listen now for an update on the UK Water sector and the AMP7 Process. This webinar aims to address the key questions around water utilities:

  • What is Fitch’s credit view on AMP7?
  • How will financial profiles evolve?
  • What are the main long-term debt serviceability considerations?
  • What could nationalisation mean for creditors?


Listen Now

Fitch and CRU Group Expand Strategic Agreement to Incorporate Fertilizer Analysis

Fitch Ratings-London-18 June 2019: Fitch Ratings and CRU Group today announced an expansion of the existing strategic agreement, under which CRU's metals and mining market expertise is incorporated into Fitch's industry research and credit analysis, to include the fertilizer markets.

U.S. Tariffs Could Directly Affect 1 in 5 Mexican Corporates

The imposition of broad-based tariffs on U.S. imports of Mexican goods could have a direct negative revenue effect on 20% of Fitch Ratings' Mexican-rated corporates. However, depending on the duration and level of tariffs levied, there would also likely be indirect effects on Mexican companies linked to the broader macroeconomic repercussions of heightened trade tensions.

Settlement Risk and Drivers of Australian REIT Ratings

Fitch Ratings addresses key themes facing Australian residential developers and REITs following the country's real-estate boom over the past decade in two reports released today.

Corporate Ratings Navigator

Navigator is a graphical peer comparison tool covering 50 sectors across all regions
 

Navigator Interactive is an interactive version of the Navigator comparison tool, available online and offline

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