Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : The Stock Market Bubble -- Ignore unavailable to you. Want to Upgrade?

To: yard_man who wrote (1544)	9/3/1998 2:22:00 PM
From: Box-By-The-Riviera™	Respond to of 3339

Moody's cuts Venezuela country ceiling ratings Thursday September 3, 1:59 pm Eastern Time (Press release provided by Moody's Investors Service) NEW YORK, Sept 3 - Moody's Investors Service today downgraded the country ceiling for foreign currency bonds and notes of Venezuela to B2 and the country ceiling for foreign currency bank deposits to Caa1. Consequently, all B1-rated bonds of the Republic of Venezuela, Banco Central de Venezuela, and other issuers domiciled in Venezuela have been downgraded to B2. A list of the affected public-sector and corporate bonds is appended below. A separate press release concerning ratings of Venezuelan banks is being issued simultaneously. Local currency denominated bonds of the Republic were downgraded to Caa1. Moody's noted that the Venezuelan authorities are continuing their unsuccessful attempts to control domestic liquidity, to contain the drain of international reserves, and to rein in the fiscal deficit. In a context of growing uncertainty, however, the reduction in the overall availability of financial resources for emerging markets is likely to place increased pressure on Venezuelan macroeconomic conditions, while heightening the country's vulnerability to oil price volatility. Consequently, the measures taken to date are not likely be enough to sustain the delicate balance of economic policies required until structural reforms are more firmly rooted. The fiscal adjustment effort relies mostly on large cuts in PDVSA's (the national oil company's) investment plan to help finance a widening of the central government fiscal deficit. Steep increases in domestic interest rates appear to have provided only little relief for the bolivar exchange rate in local markets, as reflected in dwindling international reserves. Outstanding B1-rated bonds of the following issuers are downgraded to B2: CANTV Finance Ltd. Petroleos de Venezuela, S.A. Venezuela, Republic of New York. ________________________________________________________ Between columbia and the above.....seems to be Latam is ready to go the way of the world......... West Eur and the USA....islands in a world storm???? I think not. Joel

To: yard_man who wrote (1544)	9/3/1998 3:06:00 PM
From: Box-By-The-Riviera™	Respond to of 3339

Moody's cuts Brazil foreign currency debt ratings (Press release provided by Moody's Investors Service) NEW YORK, Sept 3 - Moody's Investors Service today downgraded the country ceiling for foreign currency bonds and notes of Brazil to B2 and the country ceiling for foreign currency bank deposits to Caa1. Consequently, all B1-rated bonds of the Republic of Brazil and of other issuers domiciled in Brazil have been downgraded to B2. Local-currency denominated bonds of the Republic of Brazil and of the Central Bank of Brazil have been downgraded to Caa1. A list of the affected public-sector and corporate bonds is appended below. A separate press release concerning ratings of Brazilian banks is being issued simultaneously. Moody's noted that increased international volatility of global capital markets has heightened Brazil's vulnerability to sudden changes in investors' confidence. Until recently massive foreign capital inflows have helped to sustain a mix of tight monetary policy, loose fiscal policy, a strong Real and a slow pace of structural reform implementation. As foreign-currency funding becomes scarcer and more expensive, the continuance of high twin deficits is likely to strain the sustainability of such a mix. The slow pace of fiscal adjustment has contributed to the build up of a large and rapidly growing domestic debt which is likely to complicate the debt servicing position of the federal government and to place increasing pressure on an already-difficult fiscal position. Although Brazil has made significant progress on a number of fronts, including price stability, a new round of constitutional amendments is needed to further fiscal consolidation and reduce overreliance on domestic debt. Moody's said that Brazil's large domestic and external financial requirements in the context of a reduction in the overall availability of financial resources for emerging markets are adversely affecting the creditworthiness of the country, in spite of a high level of accumulated international reserves. Outstanding B1-rated bonds of the following issuers are downgraded to B2: Aracruz Celulose S.A. Brazil, Federative Republic of Ceval Alimentos S.A. Ceval Overseas Ltd. CSN Iron S.A. Espirito Santo Centrais Elec. Globo Comunicacoes Participacoes Multicanal Participacoes S.A. Petroleo Brasileiro S.A. Rio de Janeiro, City of Rossi Residencial S.A. Telecomunicacoes Brasileiras Issuer-level B1 ratings of the following entities are downgraded to B2: Bahia, State of Ceara, State of New York. published today

To: yard_man who wrote (1544)	9/3/1998 3:16:00 PM
From: Box-By-The-Riviera™	Read Replies (1) \| Respond to of 3339

US Banks next?? NEW YORK, Sept 3 - Citing reported losses by the largest U.S. banks resulting from recent market turmoil in Russia, Standard & Poor's announced today that it views these losses as manageable and does not anticipate further losses from remaining Russian exposure. Because the effects of the crises seem to be widening, Standard & Poor's is closely monitoring the market volatility in Latin America, particularly Brazil, Argentina, and Venezuela, and how that might affect U.S. banks. ''It is clear that the ripple effect of the successive crises in emerging markets is widening,'' says Tanya Azarchs, a director in Standard & Poor's Financial Institutions Ratings group. ''However, the crises, as well as the general slackness in high yield markets, will be most felt by those banks that are most focused on those particular market segments,'' Ms. Azarchs adds. The only rating change Standard & Poor's is considering based on recent turmoil is that of Bankers Trust Corp., which was placed on CreditWatch with negative implications yesterday. Recent weakness in the high yield market could affect Bankers Trust's corporate finance earnings which had been driving the bank's growth. ''The loan quality issues presented by the emerging market crises have yet to run their course,'' Ms. Azarchs adds. ''Banks have dramatically reduced their exposure to the countries that are refinancing in Asia. Yet the loss content of the original exposure probably is not reduced proportionally, as it is the better credits that have been able to pay out their obligations, leaving the hard core problems in place.'' Standard & Poor's recently estimated that the exposure of U.S. banks to the crisis in Asia totaled $4 billion, or 15% of an original exposure of $27 billion. Standard & Poor's has not increased that loss estimate and believes that current rating levels are appropriate. However, as more countries become engulfed by the spreading crises, bank loan exposure will obviously grow, and Standard & Poor's will review bank ratings accordingly. Furthermore, as the spreading crises affect more important trading partners, analysts are closely watching what effect this might have on the U.S. economy. ''Whatever the outcome in Latin America, there is sufficient evidence that the credit cycle for U.S. banks has turned,'' Ms. Azarchs adds. ''It turned first for those banks with international exposure. It has also turned for those with exposure to high risk domestic sectors such as subprime lending. Competitive conditions in the high risk sectors, such as high yield corporate lending and real estate related lending are such that one can expect problems will begin to surface there as well,'' Ms. Azarchs adds. Viewed in combination with lower income potential from market related sources of income (such as private equity and underwriting) the outlook is for bank profitability to be significantly off of its highs of recent years. Ratings for U.S. banks are generally at sufficiently conservative levels to discount declining profitability. However, should the credit cycle accelerate rapidly such that losses begin to erode capital, downgrades could become a possibility, Standard & Poor's said.