Curves and Edges: A Fil-Am in Moody's

MANILA - Just a light side to the guy we reach out to when we need a health check on our country's sovereign ratings.

Christian de Guzman of Moody's, by name, sounds very Filipino, but it's really hard to tell if you just play it by ear.

With his thick American accent, the Filipino roots is imperceptible.

When he was asked, "Pinoy ka ba?", he answered he is a "Fil-Am," or Filipino-American.

He grew up in Manila and at the age of 8 moved overseas, where he studied, worked and eventually lived.

He took on several jobs in the US, among them the IMF in Washington, D.C. before heading to Singapore, where he's been based for some 15 years now, working senior sovereign risk analyst for Moody's.

He last visited Manila earlier this year for an on-the-ground feel of how our Philippine economy is humming along.

He said the Philippines remains resilient to external shocks. Moody's earlier raised the country's foreign and local bond ratings to just a notch below investment grade, with a "stable" outlook.

source: www.abs-cbnnews.com

US probes Moody's rating agency - report

NEW YORK - US authorities are investigating the credit rating agency Moody's over its glowing assessments of mortgage deals in the runup to the 2008 financial crisis, The Wall Street Journal reported Sunday.

Citing people familiar with the situation, the newspaper said Justice Department officials had met with several former Moody's executives. It wasn't yet clear if the probe would result in a lawsuit.

If the investigation is confirmed, Moody's would become the second major US credit-rating firm in the Justice Department's crosshairs, after a case against Standard & Poor's.

S&P is expected to within days agree to pay $1.37 billion to settle lawsuits over its rosy grading of mortgage bonds in the financial crisis, sources told AFP.

Neither Moody's nor the Justice Department were immediately reachable for comment Sunday.

US authorities are probing whether the firm compromised its standards to score deals, the Journal reported, and the focus is on residential mortgage deals from about 2004 to 2007.

Positive ratings on what turned out to be extremely risky mortgage deals, known as subprime loans, were a main cause of the 2008 financial collapse.

Investors rely on rating firms' grades to assess risk.

Numerous banks have already paid huge fines and settlements for their roles in packaging and selling the bonds as low-risk, solid investments.

source: www.abs-cbnnews.com

Moody's expects improved credit ratings for BPI, Metrobank

MANILA, Philippines - The credit metrics of two of the country’s biggest banks – Metropolitan Bank & Trust Co. (Metrobank) and the Bank of Philippine Islands (BPI) – are expected to continue to improve in the next 12 to 18 months, international rating agency Moody’s Investors Service said.

Moody’s, which affirmed the Baa3/ Prime-3 deposit ratings of both Metrobank and BPI, said the ratings outlook remains positive.

The Baa3/ Prime 3 rating falls under an investment grade, which means the financial institution has the ability to repay short-term debt with moderate credit risk.

Moody’s has also revised the outlook of the D+ standalone bank financial strength ratings (BFSRs) of the two banks – equivalent to a baseline credit assessment (BCA) of baa3 – to positive from stable.

According to Moody’s, it views the two banks’ financial profiles to be strong for their baa3 BCA.

“The banks’ BCA also takes into account the banks’ consistently robust capital and liquidity profiles, which reflect discipline and prudence in business growth,” it said.

Taking into account the banks’ recent efforts to strengthen their capital base in preparation for future business growth, Moody’s said it expects the two banks to maintain capital levels well above the minimum capital requirements under Basel III.

Moreso, the credit rating agency expects an improvement in the operating environment of the Philippine banking system, owing to robust growth of the Philippine economy and stabilizing external conditions.

Moody’s said the credit profiles of BPI and Metrobank are among the most defensive and best positioned to withstand a cyclical downturn among Moody’s rated banks in the Philippines, as well as similar-rated banks in the region.

The baa3 BCAs of the two banks remain in line with the sovereign rating of the Philippine government (Baa3 positive), taking into account the close correlation between the creditworthiness of the banks and that of the government.

Given the positive outlook, Moody’s said an upgrade of the sovereign rating would likely lead to an upgrade of the banks’ ratings, assuming their credit metrics remain robust.

source: www.abs-cbnnews.com

PLDT likely to pursue multimedia investments, says Moody's

MANILA – Moody’s Investors Service believes that Philippine Long Distance Telephone Co. (PLDT) will continue to pursue investments in multimedia, but warned that the dominant carrier should only go after large investments.

“PLDT is likely to continue to seek investment opportunities in the multimedia sector to strengthen its ability to deliver multimedia content through its broadband and mobile networks,” Moody’s said.

“Moody's views that unless PLDT moves towards large debt-funded acquisitions of major companies, the near-term credit impact of its investments in the multimedia sector will be immaterial,” the ratings agency added.

PLDT President Napoleon Nazareno earlier said the PLDT Group is pursuing multimedia initiatives through PLDT, Smart Communications, Sun Cellular, and Cignal TV.

On Tuesday, PLDT chairman Manuel V. Pangilinan said acquisition talks with GMA Network Inc. collapsed anew after its offer to buy a minority stake in the company expired in February.

“Our offer expired already. It expired in the first week of February,” Pangilinan said.

He added that the PLDT Group has yet to decide if it will revive talks to acquire the broadcasting company, which it had tried to acquire several times before.

“Well, we don’t know. I am getting tired,” Pangilinan said.

source: www.abs-cbnnews.com

Moody's drops France's credit rating

Credit rating firm Moody's Investors Service lowered France's AAA rating a notch Monday, citing the country's high exposure to investments in Spain and Greece.

Moody's said the outlook for France to steer clear of trouble was diminishing, given the high level of investments in troubled eurozone countries, The Daily Telegraph reported Monday.

Moody's, which dropped France from the top rating of AAA to Aa1, also cited France's poor track record in making changes.

Moody's, which gave France's rating a negative outlook nine months ago, is now the second major credit rating agency, along with Standard & Poor's, to downgrade its credit rating.

Fitch Ratings, which is a French company, has so far left France at AAA.

Moody's said France was being hurt by rigid labor laws and outmoded corporate regulations.

While President Francois Hollande's administration was attempting to make positive changes, "The track record of successive French governments in effecting such measures over the past two decades has been poor," Moody's said.

"Moody's is now giving France the same rating as Standard & Poor's, which has allowed us to live with low interest rates for many months," said French Finance Minister Pierre Moscovici, referring to borrowing costs for the French government, which have not been adversely affected by the change in its credit status.

However, "further shocks to sovereign and bank credit markets would further undermine financial and economic stability in France as well as in other euro area countries," Moody's said in a statement.

source: upi.com