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Mix-Ansicht- UNITED-STATES: A1 on rating watch with negative implications - Günter, 17.07.2001, 13:27
UNITED-STATES: A1 on rating watch with negative implications
UNITED-STATES: A1 on rating watch with negative implications
Company payment behaviour is deteriorating in an unfavourable macro-economic context.
The Federal Reserve's successive reductions of its key rate have not stemmed the decline in investments or boosted stock market trading. Although the key rate is now at its lowest level in seven years, new reductions intended to stimulate the economy are expected.
Weakening household confidence has only moderately affected consumption. However, the saturation of some needs, slower pace of job creation, and high indebtedness could rapidly drag down consumption.
The demand slowdown is weakening companies, especially the large number of businesses created during the euphoria of recent years, which have not yet consolidated their financial situation. The number of company bankruptcies, which had been falling for three years, is no longer declining. Moreover, it could begin to rise considering the Federal Reserve's recent message of caution to banks and the unfavourable payment experience already recorded by Coface. Recently created companies with a high-technology focus are the most exposed. However, the distribution sector and traditional manufacturing industries (steel, textile, stationery) are also vulnerable to bankruptcies, especially as their restructuring is not yet complete.
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