Ratings Agency Gives Favorable Corporate Credit Outlook to U.S.

Fitch Ratings had a busy week, chiming in on several of the world’s most important economies, including the United States. Fitch appeared somewhat rosy on the prospects for U.S. corporate credit. Fitch analysts called conditions “favorable” and officially set the outlook for credit as “stable” even as it noted that the potential impact of international volatility or that the short-term fiscal cliff solution “will do little to address tax and spending uncertainties."

“Modest GDP growth in 2013, healthy operating margins, solid balance sheets and extended maturity profiles provide ample flexibility to face macroeconomic risks abroad and government tax-spending uncertainties…Credit risks remain largely company-specific and are characterized more by business-model risk and operating underperformance rather than leverage. As in 2012, downgrade risks in investment grade will be concentrated among companies that are underperforming peers groups.”

Fitch was most positive on oil and gas (refining) as well as those related to housing among domestic industries. The agency was not, however, very optimistic on China, India or Japan over issues like debt levels.

-Brian Shappell, CBA, NACM staff writer

(Note: For more on Fitch's somewhat negative Asian outlook and what U.S. industries it favors most and least for 2013, check out this week's eNews edition, available late Thursday afternoon at www.nacm.org).

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