Moody’s: Homebuilders will suck more wind
Posted on October 1, 2009 at 7:06 am
Not-so-happy thoughts from credit ratings group Moody’s on the state of the residential construction sector: The current economic climate looks set to extinguish the embers of hope and push home prices down further and longer than previously expected.
“We expect that the industry’s one relatively bright spot—that is, robust cash-flow generation—will keep fading in the year ahead, as inventory liquidation plays itself out and funds from operations remain negative,” Snider said. Moody’s base case calls for pre-impairment operating losses to worsen by 8% in 2009 and improve modestly, but still be in a loss position in 2010.
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How CRE is souring – and who will soon be buying it
Posted on September 22, 2009 at 8:22 am
Commercial real estate valuations are on their way into the tank: A report by Moody’s puts the drop at 5 percent in July alone and says the past year’s plummet puts us back at late ‘03 levels. But, says Diana Olick, there are numerous big-pocketed buyers preparing to be the white knights.
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Moody’s gets more positive on CCA
Posted on September 18, 2009 at 6:44 amMoody’s Investors Service says Corrections Corp. of America has a strong enough balance sheet and outlook to allow the debt ratings firm to begin thinking about a full-fledged upgrade.
Moody’s would expect to raise CCA’s rating should total assets reach $3.5 billion and revenues approach $2 billion without marked deterioration in its credit profile. Concurrently, CCA would need to maintain its dominance in the private corrections industry, without the sector losing its share relative to public operators.
Shares of CCA (Ticker: CXW) are up about 40 percent in 2009.
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Moody’s: No end yet to banks’ credit troubles
Posted on September 10, 2009 at 1:01 pmThe ratings agency this morning reiterated its negative rating on the banking sector, saying it does “not believe asset quality deterioration for the US banking industry has reached its peak.” Commercial real estate in will be a particular thorn in the side going forward, Moody’s analysts said.
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Real estate going the wrong way
Posted on June 24, 2009 at 5:35 pm
The latest Moody’s/Real Estate Analytics report on the nation’s commercial property market says prices have fallen to 2004 levels. A year ago, prices were the same as in 2005.
“There’s all this talk of green chutes, people saying the second order of employment data is positive,” said Neal Elkin, president of Real Estate Analytics, LLC, one of the study’s two sponsors. “We’re in a situation now where our second order of returns [for real estate] is sharply negative. That’s a little intimidating.”
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Regions to raise $1.25B
Posted on May 20, 2009 at 8:33 am
The biggest bank in Middle Tennessee will sell $1 billion in common stock and $250 million in preferred shares that will convert to common by the end of 2010 at the latest. The move comes two weeks after the government’s stress test called on Regions (Ticker: RF) to find $2.5 billion in new capital and two days after Moody’s cut the bank’s credit rating with the following commentary.
Although Regions entered this period with relatively sound capital ratios — at March 31, 2009, Tier 1 risk-based was 10.41% and Moody’s adjusted tangible common equity (TCE) ratio was 7.77% - Moody’s believes Regions’ capital position is likely to be increasingly challenged by the substantial credit costs it faces.
Moody’s negative outlook on Regions considers the possibility that in a more pronounced economic downturn than is currently expected, the company’s performance might be negatively impacted, not only from asset quality deterioration, but also from pressure on businesses dependent on the level of asset prices, such as trust and investment management. That could weaken earnings and add to the downward pressure on Regions’ capital base.
SEE ALSO: If the capital-raising plan doesn’t work, there’s always the ‘For sale’ sign option.
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Rating agencies take aim at regional banks
Posted on April 24, 2009 at 12:56 amS&P has lowered its rating on First Horizon, saying the parent of First Tennessee is likely to face even more bad loans later this year. Over at Moody’s, analysts slashed their rating on SunTrust by three notches over concerns that the bank’s capital position will continue to deteriorate.
They also cited the bank’s commercial real estate exposure as a factor. Their peers at Deutsche yesterday said losses from that sector could reach $1 trillion, a number that is “likely to dominate the industry for the better part of a decade.”
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Nissan ratings cut
Posted on February 26, 2009 at 8:31 am
Moody’s has lowered its ratings on Nissan by two notches, saying its lower profitability will hurt its credit metrics. The company also said this morning that reports of a production boost in March aren’t what they seem.
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Moody’s goes negative on Gaylord
Posted on January 26, 2009 at 1:04 pmThe credit rating agency says, not surprisingly, that the outlook for the hotel company is so-so at best.
“Although operating performance is expected to improve as its newest property — the Gaylord National — ramps up, we believe operating metrics will remain under pressure and the ability to raise average daily rates will become more difficult.”
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Hangin’ in there
Posted on November 19, 2008 at 5:25 pmTennessee is one of many states Fortune says are in better financial shape than after 9/11. But Kentucky and Florida are on the watchlist for a downgrade.
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