Tuesday, March 24, 2009

283 US firms going down

Sectors least represented in the Bottom Rung group include natural products, forest products, healthcare, metals and mining.
clipped from www.guardian.co.uk

US industrial companies such as Eastman Kodak, media firms such as Univision Communications and carmakers including Ford and General Motors have a 45% chance of going bust in the next 12  months, according to a report published today.

In a new "Bottom Rung" list, credit ratings agency Moody's names 283 American companies that it says may file for insolvency in the medium term.

"Tight credit markets and the global economic downturn are rapidly swelling the population of US companies with [a] high default risk and weak liquidity," Moody's said in its report.

Media and car companies make up about a quarter of the list, as both sectors are suffering from the reduction in discretionary spending during the global credit crunch. With rising unemployment and banks closing the tap on consumer and corporate loans, car sales have plunged, and so has the number of advertisements in newspapers and broadcasting.

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