The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site. Please see our Subscription Terms and Conditions.


All material subject to strictly enforced copyright laws. © 2022 Euromoney, a part of the Euromoney Institutional Investor PLC.

Finding ways out of the mire

For years companies leveraged up to boost shareholder returns. When the boom burst the disappointment of stockholders was as nothing to the wrath of creditors who have pushed companies to the brink. Some have pulled back, others are still teetering, only a few have steered well clear of trouble.

Balance sheet management has become a preoccupation of nearly every corporate issuer of debt. If the plight of credits such as WorldCom wasn't enough to scare finance teams into decreasing leverage and enhancing liquidity, the ratings agencies did the job. Keen to look as if they were responding to events and to protect their own reputations, the credit raters have made sure that any mavericks fell into line.

That has applied across the board from triple-A rated frequent issuers to fallen angels. GE Capital, for example, has been forced to reduce its reliance on short-term debt and justify its leverage levels. It is now faced with the task of bolstering its balance sheet sufficiently to convince rating agencies that it deserves to remain triple-A if it becomes a financially independent finance company.

ABB has seen its credit rating at Moody's fall from double-A to single-B within the space of 12 months. In the section on ABB below, CFO Peter Voser talks to Euromoney about the emergency action his company has had to take to shore up liquidity and honour debt repayments. ABB has had to do this while facing the worst conditions in its operating business for 20 years and dealing with the threat of impending asbestos litigation.

One

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.

SUBSCRIBE ONLINE TODAY

Unlimited access to Euromoney.com and Asiamoney.com

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually

FREE 7 DAY TRIAL

Unlimited access to Euromoney.com and Asiamoney.com, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors

LOGIN NOW

Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree