《标普全球：全球债务杠杆-2023年现金流为负的企业可能翻一番（英文版）（15页）.pdf》由会员分享，可在线阅读，更多相关《标普全球：全球债务杠杆-2023年现金流为负的企业可能翻一番（英文版）（15页）.pdf（15页珍藏版）》请在三个皮匠报告上搜索。

1、 Credit Research Christine Ip Yucheng Zheng Terence Chan,CFA David Tesher Eunice Tan Global Head of Ratings Thought Leadership Ruth Yang Contents What we think 2 Scenario assumptions 4 Scenario outcomes 6 Related research 10 Appendix 11 Global Debt Leverage Cash Flow Negative Corporates Could Double

2、 In 2023 A Stress Test Of 20,000 Unrated Corporates Dec.12,2022 This report does not constitute a rating action Key Takeaways Worsening conditions in 2023 could temper this years tentative rebound in average earnings.Our stress tests show less-creditworthy corporates are still vulnerable.Under our b

3、ase case,cash flow negative firms would rise to 11%,from 8%in 2021.Severe stress test shows double trouble.Weve repeated the tests we last did in July.In our severe test in which interest spreads and inflation increase by 300 bp each,the cash flow negative ratio doubles to 16%.China corporates remai

4、n most vulnerable.As we expected,the cash flow negative ratio of this cohort rises the most under stress(in percentage point terms).This is followed by Asia-Pacific ex-China and emerging markets,then Europe and North America.Chart 1 Cash Flow Negative Corporates Double In Our Severe Inflation-Intere

5、st Stress Test Note:Stress factors shown in the above infographic relate to the severe stress test.APAC-Asia-Pacific.Ex-CN-Excluding China.EM-18-Emerging markets-18.bp-Basis points.a-Actual.p-Projection.Source:S&P Global Ratings.Global Debt Leverage:Cash Flow Negative Corporates Could Double In 2023

6、 Dec.12,2022Dec.12,2022 2 What We Think A shadow hangs over global corporates heading into 2023.As the Russia-Ukraine war drags on and major central banks continue to fight inflation,global corporates face a triple-whammy of lower growth,squeezed margins,and deteriorating financing conditions in 202

7、3(see Global Credit Outlook 2023:No Easy Way Out,published Dec.1,2022).Earnings rebounded for many corporates in 2021 and early 2022 on pent-up demand amid the pandemic recovery and a greater ability to pass on higher input costs to customers.But the positive momentum is fading,given rising borrowin

8、g costs and a deepening cost-of-living crisis for consumers.In our base case,cash flow negative corporates will increase by a third by 2023.To get a broad overview of how global unrated corporates are faring,we looked into a global sample of 20,000 nonfinancial corporates(89%unrated).Our base-case p

9、rojection sees cash flow negative corporates rising to 11%of the sample in 2023 from 8%in 2021,given a trifecta of a global slowdown,cost overhang from the current round of inflation,and higher interest rates.Inflation-interest stress test highlights vulnerabilities.Although we expect cost inflation

10、 to ease in 2023,price pressures could linger if supply problems drag on,biting further into earnings.In our severe stress test,we assume additional producer price inflation of 300 basis points(bp)over our base case in 2023;and half that for the intermediate stress test.Meanwhile,stickier inflation

11、could prompt investors to demand higher interest spreads to preserve real returns.Correspondingly,we also stressed average interest spreads by 300 bp over our base case in 2023 for the severe stress test,and half that for the intermediate one.Corporates deemed to be at low and moderately low risk ar

12、e subject to lesser stress amounts,and those in the high-risk category a greater amount.Cash flow negative corporates could double in severe stress.In the severe stress test,the debt-weighted ratio of cash flow negative corporates doubled to 16%in 2023,from 8%in 2021(see table 1).Under stress,the Ch

13、ina subsamples cash flow negative ratio rises the most in terms of percentage point movements,to 27%from 12%.Asia-Pacific ex-China is close behind,at 14%from 8%.Europe and North America fare better,at 11%and 7%,from 7%and 4%respectively.Table 1 Stress Test:Every Region Will See A Lot More Corporate

14、Cash Flow Negatives In 2023 Cash flow negatives(%of debt)for corporate sample by region Cash flow negatives(%)Sample debt($tril.)Sample count Average risk tier Actual 2021 Baseline,2022p Baseline,2023p Intermediate shock,2023p Severe shock,2023p Global 42 20,000 4.2 8%9%11%13%16%APAC ex-CN 7 8,097 4

15、.2 8%9%12%13%14%China 16 5,284 4.7 12%14%17%23%27%EM-18 3 3,441 4.0 9%10%13%13%14%Europe 7 2,838 3.9 7%7%8%10%11%Latin America 1 755 3.8 6%6%6%7%8%North America 10 2,466 3.6 4%4%5%5%7%Average risk tier is shown as a numeric equivalent where 1.5=“low”,3=“moderately low”,4=“moderately high”,5.5=“high”

16、,7=cash flow negative.This calculation is a rough ranking of credit risk that references an entitys debt-to-EBITDA and ratio of funds from operations to debt.Ratios are debt weighted.p-Projection.APAC ex-CN-Asia-Pacific excluding China.EM-18-18 emerging markets,namely Argentina,Brazil,Chile,Colombia

17、,Egypt,India,Indonesia,Malaysia,Mexico,Nigeria,Peru,Philippines,Poland,Saudi Arabia,South Africa,Thailand,Turkey,and Vietnam;we examine China separately due to the vastness of its debt volume.tril.-Trillion.Original data source:S&P Global Market Intelligence.Source:S&P Global Ratings.Global Debt Lev

18、erage:Cash Flow Negative Corporates Could Double In 2023 Dec.12,2022Dec.12,2022 3 Chinas corporate leverage merits special attention.Countries with already-high corporate leverage most vulnerable.Corporates are navigating an enormous debt overhang(see Global Debt Leverage:How Heavy Is The Worlds Deb

19、t Burden?,published Nov.21,2022),a result from the lower for longer decade and cheap money enabled by low interest rates during the pandemic(see charts 2a and 2b).The global slowdown would acutely hit geographies where corporate leverage is already elevated.China,in particular,merits special attenti

20、on.In the decade through June 2022,Chinas nonfinancial corporate debt-to-GDP grew by 20%to reach a staggering 123%.With Chinas corporate debt of$27 trillion equivalent to 31%of the global total,the Chinese government faces a very difficult task in resolving the debt overhang,without causing economic

21、 chaos(for further details,see Global Debt Leverage:Chinas SOEs Are Stuck In A Debt Trap,published Sept.20,2022).Chart 2a Global Debt Has Crept Up Over The Past Decade Global debt(tril.US$),2009 to June 2022 Chart 2b Leverage Levels Remain Elevated Global debt-to-GDP(%),2009 to June 2022 Shaded area

22、 refers to the 2020 COVID pandemic breakout.Data source:Institute of International Finance.Shaded area refers to the 2020 COVID pandemic breakout.Data source:Institute of International Finance.02040608000004713HouseholdsNonfinancial corporatesGo

23、vernmentFinancial corporates02040608000004713HouseholdsNonfinancial corporatesGovernmentFinancial corporatesJun-22 Jun-22 Global Debt Leverage:Cash Flow Negative Corporates Could Double In 2023 Dec.12,2022Dec.12,2022 4 We test for a 300 bp rise

24、in cost of goods sold and a 300 bp average rise in interest spreads.Scenario Assumptions Our stress test scenario applies the following assumptions(see Appendix for details):1.General inflation shock.Our base case is for producer price index(PPI)inflation to ease in the second half of 2022 and conti

25、nuing into 2023.In our stress scenario,however,global inflation persists in 2023,driven by supply problems despite efforts of central banks around the world in hiking policy rates.In this scenario,cost pressures could persist for corporates.Subsequently,we applied stress to the corporates cost of go

26、ods sold(COGS).Intermediate stress:We applied 150 bp of additional inflation over the 2023 base case.Severe stress:We applied 300 bp of additional inflation over the 2023 base case.Corporates ability to pass higher costs on to customers:We use our analytical teams regional assumptions on cost pass-t

27、hrough rate on a sector-by-sector basis.2.Base interest rates.We factor in incremental base interest rates(akin to central bank policy rates)over 2021 of:220 bp for the 2022 average;450 bp for the 2023 average;and 425 bp for the 2024 average.Our assumptions reflect our view that central banks will k

28、eep raising policy rates in 2023 and ease them slightly in 2024 as the momentum of inflation abates.Since Chinas central bank is moving in the opposite policy direction,for the China sample we applied the following over the 2021 level:a decrement of 30 bp for 2022(accounting for the two rate cuts of

29、 10 bp each that had taken place earlier this year),and a flat level for 2023 and 2024.3.Interest spread shock.The interest spread shock reflects our expectation that investors will demand higher returns to compensate for higher-than-expected inflation in 2023.We shock interest spreads by:150 bp in

30、2023 for the intermediate stress;300 bp in 2023 for the severe one.The spread figures mentioned above are averages with the specific spread shock differing based on the risk category of the corporate.The spread shock is applied only on floating rate,maturing debt(which presumably will be refinanced)

31、,and new borrowing.Bulk of nonfinancial corporates face foreign exchange risk Although not part of the stress test scenario,foreign exchange(forex)volatility has picked up as the U.S.dollar strengthened since mid-2022,a source of pain for corporates in terms of imported inflation.It also has implica

32、tions on entities with substantial dollar-denominated debt obligations.This will be felt keenly in regions and geographies where local currency depreciation against the dollar has been acute(e.g.,Asian corporates,see Asia-Pacifics Strong-Dollar Problem:Inconvenience Today,Headache Tomorrow,Nov.10,20

33、22).Risk Categorization Sampling and risk categorization.We drew a sample of financials for 20,000 nonfinancial corporates(89%unrated,84%listed,total debt:$42 trillion)from S&P Global Market Intelligences CapitalIQ database.This is equivalent to 48%of total global nonfinancial corporate debt(based o

34、n Institute of International Finance data)as of June 2022.Global Debt Leverage:Cash Flow Negative Corporates Could Double In 2023 Dec.12,2022Dec.12,2022 5 Five risk categories.For each corporate,we calculate its debt-to EBITDA and funds from operations(FFO)to debt ratios.After adding in country and

35、industry sector risks,we assign the corporate to a risk category:low,moderately low,moderately high,high,and cash flow negative(when either FFO or EBITDA are negative).(FFO equals EBITDA less net interest and tax expense.Adjusted debt equals gross debt less 75%of cash equivalents.See Appendix for de

36、tails).Ratios are debt weighted.In computing regional and global ratios,country components are reweighted based on total actual country debt(source:Institute of International Finance).Sample debt risk worse than our rated portfolio.On a debt basis(rather than issuer count),the corporate sample(mostl

37、y unrated)is generally of lesser credit quality than our rated nonfinancial corporate portfolio.The rated portfolios implied debt is three-quarters investment-grade(although half by issuer count)(see chart 3a).Although not strictly a like-for-like comparison,the samples debt risk distribution is mor

38、e pyramidal with over two-thirds moderately high risk or worse(see chart 3b).Chart 3a Our Rated Corporate Debt Portfolio Is Three-Quarters Investment Grade Percent(%)Chart 3b Whereas Over Two-Thirds Of Sample Debt Is Moderately High Or Worse Percent(%)Data as of July 1,2022.Source:S&P Global Ratings

39、.The high category includes cash flow negative corporates.Sample financials data as of first half 2022.Source:S&P Global Ratings.37391112A and aboveBBBBBB and below10203040LowModeratelylowModeratelyhighHighGlobal Debt Leverage:Cash Flow Negative Corporates Could Double In 2023 D Dec.12,2022ec.12,202

40、2 6 Cash flow negative ratio could double to 16%by 2023.Scenario Outcomes Base-case conditions are challenging.We project the cash flow negative ratio to rise to 9%by end-2022 from 8%in 2021(see chart 4a).Given the overhang of debt in the high-risk category,corporates easily tip into cash flow negat

41、ive territory under stress.Consequently,we project cash flow negative corporates to rise two-thirds to 13%by 2023(see chart 4b)under intermediate stress,and in the severe scenario,double to 16%(see chart 4c).Interest spreads stress drives cash flow negative transitions.The question is which stress f

42、actor has a greater impact on cash flow negative transitions-higher interest spreads or cost inflation.Unsurprisingly,the interest spread stress has a relatively greater impact(see chart 5).With central banks around the world(except China)hiking policy rates,and lenders demanding higher spreads to c

43、ompensate for greater risks,interest costs have surged for corporates.This is sobering,given the widespread accumulation of nonfinancial corporate debt that has taken place during the lower for longer decade.On the other hand,the inflation hit is relatively muted,given we expect PPI inflation to com

44、e down in 2023 in our baseline.Although the intermediate and severe inflation stress assumptions imply cost inflation remains sticky,this shock is moderated by the degree to which the corporates can pass additional higher costs to customers.Not all cash flow negative entities will default.Naturally,

45、not all cash flow negative corporates become nonperforming loans(NPLs)or defaults.Defaults are tied to the corporates liquidity,which in turn is driven by the duration of losses,cash reserves,the ability to convert assets into cash,debt payments coming due,and willingness of financial and trade cred

46、itors to patiently wait for their money or a corporate turnaround.Chart 4a Even In Our Base Case,Cash Flow Negatives Rise A Third By 2023 Global corporate sample(%of debt)Chart 4b In The Intermediate Scenario,Cash Flow Negatives Are Up Two-Thirds By 2023 Global corporate sample(%of debt)Ratios are d

47、ebt weighted.p-Projection.Data source:S&P Global Market Intelligence.Source:S&P Global Ratings.Ratios are debt weighted.p-Projection.Data source:S&P Global Market Intelligence.Source:S&P Global Ratings.03231120212022p2023pLowModerately lowModerately highHighCashflow negative101

48、31320212022p2023pLowModerately lowModerately highHighCashflow negativeGlobal Debt Leverage:Cash Flow Negative Corporates Could Double In 2023 Dec.12,2022Dec.12,2022 7 Asia is more vulnerable to shocks.Chart 4c In The Severe Scenario,Cash Flow Negatives Double By 2023 Global cor

49、porate sample(%of debt)Chart 5 Interest Stress Drives Cash Flow Negative Transitions Cash flow negatives(%of debt)Ratios are debt weighted.p-Projection.Data source:S&P Global Market Intelligence.Source:S&P Global Ratings.Ratios are debt weighted.p-Projection.Data source:S&P Global Market Intelligenc

50、e.Source:S&P Global Ratings.Geography Outcomes Among the regions,Asia more vulnerable.We found the Asia ex-China and China sub-samples more vulnerable than the Europe and North America subsamples.We project the cash flow negative ratio for Asia ex-China and China would be 9%and 14%in the 2022 base c

51、ase.These rise to 14%and 27%in the severe stress by 2023(see table 2 and chart 6).Table 2 Geography:Compared To Other Regions,Asia-Pacifics Cash Flow Negative Corporates Increase The Most Cash flow negatives(%of debt)for corporate sample by region Cash flow negatives(%)Sample debt($tril.)Sample coun

52、t Average risk tier Baseline,2022p Baseline,2023p Intermediate shock,2023p Severe shock,2023p Global 42 20,000 4.2 9%11%13%16%APAC ex-CN 7 8,097 4.2 9%12%13%14%China 16 5,284 4.7 14%17%23%27%EM-18 3 3,441 4.0 10%13%13%14%Europe 7 2,838 3.9 7%8%10%11%Latin America 1 755 3.8 6%6%7%8%North America 10 2

53、,466 3.6 4%5%5%7%Average risk tier is shown as a numeric equivalent where 1.5=“low”,3=“moderately low”,4=“moderately high”,5.5=“high”,7=cash flow negative.This calculation is a rough ranking of credit risk that references an entitys debt-to-EBITDA and ratio of funds from operations to debt.Ratios ar

54、e debt weighted.p-Projection.APAC ex-CN-Asia-Pacific excluding China.EM-18-18 emerging markets,namely Argentina,Brazil,Chile,Colombia,Egypt,India,Indonesia,Malaysia,Mexico,Nigeria,Peru,Philippines,Poland,Saudi Arabia,South Africa,Thailand,Turkey,and Vietnam;we examine China separately due to the vas

55、tness of its debt volume.tril.-Trillion.Original data source:S&P Global Market Intelligence.Source:S&P Global Ratings.93231620212022p2023pLowModerately lowModerately highHighCashflow negative994.260.21.0Intermediate stressSevere stressBase,2022pInterest stress,2023pInflation st

56、ress,2023pGlobal Debt Leverage:Cash Flow Negative Corporates Could Double In 2023 Dec.12,2022Dec.12,2022 8 Slow-recovering sectors hit hardest.Chart 6 Asia Samples Cash Flow Negatives Rise The Most Under Inflation And Interest Rate Stress Cash flow negatives(%of debt)Ratios are debt weighted.p-Proje

57、ction.APAC-Asia-Pacific.Ex-CN-Excluding China.EM-18-Emerging markets-18.Data source:S&P Global Market Intelligence.Source:S&P Global Ratings.In contrast,Europes ratios move up to 11%from 7%and North Americas to 7%from 4%.Latin Americas moves to 8%from 6%(admittedly,the sample may not be wholly refle

58、ctive of the situation due to limited reported financials).The emerging markets outcome of 14%from 10%is a blend of parts of Asia ex-China,Latin America,and Middle East and Africa(not shown).Industry Outcomes Stage of recovery drives industry divide.Globally,consumer discretionary,industrials and re

59、al estate sectors have not fully recovered from the COVID years and are more vulnerable to credit headwinds.In the severe stress,the cash flow negative ratio for consumer discretionary rises to 17%,for industrials to 28%,and for real estate to 32%(see table 3 and chart 7).Table 3 Sectors:Industrials

60、 And Real Estate Suffer Largest Increase In Cash Flow Negatives Cash flow negatives(%of debt)for corporate sample by GICS sector Sample debt Sample count Average risk tier Distribution of risk tiers(%of debt),2022p Stress scenario shock:Cash flow negatives,2023p Low Moderately low Moderately high Hi

61、gh Cash flow negatives Intermediate Severe Global$42 tril.20,000 4.2 11%21%31%28%9%13%16%Communication services$3,098 bil.824 4.1 7%11%52%25%4%5%6%Consumer discretionary$4,156 bil.3,187 4.3 7%23%26%32%12%15%17%Consumer staples$2,287 bil.1,437 3.9 12%24%38%23%4%5%6%Energy$3,144 bil.673 3.8 0%45%37%17

62、%1%2%2%99237141187GlobalAPAC ex-CNChinaEM-18EuropeLatin AmericaNorth AmericaBase case,2022pIntermediate,2023pSevere,2023pGlobal Debt Leverage:Cash Flow Negative Corporates Could Double In 2023 Dec.12,2022Dec.12,2022 9 Sample debt Sample count Average risk tier Distribution of r

63、isk tiers(%of debt),2022p Stress scenario shock:Cash flow negatives,2023p Low Moderately low Moderately high High Cash flow negatives Intermediate Severe Healthcare$1,924 bil.1,233 3.3 30%25%26%13%5%6%6%Industrials$12,547 bil.5,408 4.7 4%7%21%55%13%23%28%Information technology$1,946 bil.2,149 3.7 10

64、%44%31%9%6%8%9%Materials$3,185 bil.2,390 3.9 4%31%43%20%3%4%5%Real estate$4,735 bil.1,734 4.7 1%16%31%34%19%29%32%Utilities$5,123 bil.965 3.0 38%24%32%0%5%6%6%GICS=Global Industry Classification Standard(GICS)was developed by S&P Dow Jones Indices.Average risk tier is shown as a numeric equivalent w

65、here 1.5=“low”,3=“moderately low”,4=“moderately high”,5.5=“high”,7=cash flow negative.This calculation is a rough ranking of credit risk that references an entitys debt-to-EBITDA and ratio of funds from operations to debt.Ratios are debt weighted.The industrials sector includes capital goods,commerc

66、ial and professional services,and transportation entities.p-Projection.bil.-Billion.tril.-Trillion.Source:S&P Global Market Intelligence,S&P Global Ratings.Chart 7 Real Estate,Industrials,And Consumer Discretionary More Vulnerable To Interest And Inflation Stress Cash flow negatives(%of debt)p-Proje

67、ction.Ratios are debt weighted.The industrials sector includes capital goods,commercial and professional services,and transportation entities.Data source:S&P Global Market Intelligence.Source:S&P Global Ratings.94542965326GlobalCommunication servicesConsumer discreti

68、onaryConsumer staplesEnergyHealthcareIndustrialsInformation technologyMaterialsReal estateUtilitiesBase case,2022pIntermediate,2023pSevere,2023pGlobal Debt Leverage:Cash Flow Negative Corporates Could Double In 2023 Dec.12,2022Dec.12,2022 10 Related Research Global Credit Outlook 2023:No Easy Way Ou

69、t,Dec.1,2022 Global Debt Leverage:How Heavy Is The Worlds Debt Burden?,Nov.21,2022 Asia-Pacifics Strong-Dollar Problem:Inconvenience Today,Headache Tomorrow,Nov.10,2022 Global Debt Leverage:Chinas SOEs Are Stuck In A Debt Trap,Sept.20,2022 Global Debt Leverage:If Stagflation Strikes,Still-Recovering

70、 Corporate Sectors Hit Hardest,July 12,2022 Global Debt Leverage:If Stagflation Strikes,China Corporates Are Most Vulnerable,July 12,2022 Global Debt Leverage:If Stagflation Strikes,Loss-Making Corporates Will Double Globally,July 12,2022 Global Credit Conditions:Resurfacing Credit Headwinds,June 30

71、,2022 Global Debt Leverage:How A 300bp Rise In Inflation And Interest Rates Could Hit Borrowers,Dec.7,2021 Global Debt Leverage:Spreads,Costs Shocks May Double Rate Of Loss-Making,June 22,2021 Editor Alison Dunn Digital Designer Halie Mustow Evy Cheung Global Debt Leverage:Cash Flow Negative Corpora

72、tes Could Double In 2023 Dec.12,2022Dec.12,2022 11 Appendix:Data And Approach This appendix discusses the assumptions,data sources,and approach adopted in the article.Corporate financials data source and sample We drew our global sample of nonfinancial corporate financial data from S&P Global Market

73、 Intelligences Capital IQ database.Financials are for first half 2022.The sample comprises 20,000 corporates,of which 89%are unrated and 84%are listed.The sample total debt of US$42 trillion is equivalent to 48%of estimated global corporate debt at end-June 2022(as reported by the Institute of Inter

74、national Finance).Caveats The data have a statistical bias toward nonfinancial corporates that are listed and had reported their latest financials at the date of sample extraction.Consequently,some industry sectors or geographies may be over or underrepresented,on a debt-weighted basis,in the sample

75、 compared with the actual global population.As this exercise in in US$equivalent,it does not account for foreign exchange rate changes,which may benefit entities whose debt is largely in domestic currency.Parent companies and their subsidiaries are treated separately in this exercise.Sample industry

76、 coverage The global sample contains 74 industry sectors:aerospace and defense;air freight and logistics;airlines;aluminum;auto components;automobiles;building products;coal and consumable fuels;commercial and professional services;commodity chemicals;construction and engineering;construction materi

77、als;copper;distributors;diversified chemicals;diversified consumer services;diversified metals and mining;diversified real estate activities;diversified REITs;electric utilities;electrical equipment;fertilizers and agricultural chemicals;food and staples retailing;food,beverage and tobacco;gas utili

78、ties,gold;health care equipment and services;health care REITs;hotel and resort REITs;hotels,restaurants and leisure;household and personal products;household durables;independent power and renewable electricity producers;industrial conglomerates;industrial gases;industrial REITs;integrated oil and

79、gas;internet and direct marketing retail;leisure products;machinery;marine;media and entertainment;metal and glass containers;multiline retail;multi-utilities;office REITs;oil and gas drilling;oil and gas equipment and services;oil and gas exploration and production,oil and gas refining and marketin

80、g;oil and gas storage and transportation;paper and forest products;paper packaging;pharmaceuticals,biotechnology and life sciences;precious metals and minerals;real estate development;real estate operating companies;real estate services;residential REITs;retail REITs;road and rail;semiconductors and

81、 semiconductor equipment;silver;software and services;specialized REITs;specialty chemicals;specialty retail;steel;technology hardware and equipment;telecommunication services;textiles,apparel and luxury goods;trading companies and distributors;transportation infrastructure;water utilities.The engin

82、eering and construction sector includes commercial construction and engineering,construction support services,heavy construction,prefabricated buildings and components and specialty contract work subsectors.Sample geographic coverage The global corporate sample covers 60 geographies,which represent

83、over 95%of world GDP:Asia-Pacific:Australia(AU),mainland China(CN),Hong Kong(HK),India(IN),Indonesia(ID),Japan(JP),Korea(KR),Malaysia(MY),New Zealand(NZ),Pakistan(PK),Philippines(PH),Singapore(SG),Taiwan(TW),Thailand(TH),Vietnam(VN).Europe:Austria(AT),Belgium(BE),Cyprus(CY),Czech Republic(CH),Denmar

84、k(DK),Estonia(EE),Finland(FI),France(FR),Germany(DE),Greece(GR),Hungary(HU),Ireland(IE),Italy(IT),Latvia(LV),Lithuania(LT),Luxembourg(LU),Malta(MT),Netherlands(NL),Norway(NO),Poland(PL),Portugal(PT),Slovakia(SK),Slovenia(SI),Spain(ES),Sweden(SE),Switzerland(CH),Turkey(TR),Ukraine(UA),United Kingdom(

85、UK).Latin America:Argentina(AR),Brazil(BR),Chile(CL),Colombia(CO),Mexico(MX),Peru(PE).Middle-East,Africa:Egypt(EG),Ghana(GH),Israel(IL),Kenya(KE),Nigeria(NG),Saudi Arabia(SA),South Africa(ZA),United Arab Emirates(AE).North America:Canada(CA),United States of America(US).Growth assumptions Debt growt

86、h projections We applied corporate debt growth rates estimated by our analytical teams for 2022-2024 by region.Revenue growth projections We applied corporate revenue growth rates estimated by our analytical teams for 2022-2024 by region.Global Debt Leverage:Cash Flow Negative Corporates Could Doubl

87、e In 2023 Dec.12,2022Dec.12,2022 12 Notional credit risk tiers For this exercise,we determined notional credit risk tiers for each corporate in the sample.In this respect,our evaluation of the country,industry,and financial risks of the corporate sample is partially,but incompletely,borrowed from ou

88、r Corporate Ratings methodology(see“Criteria/Corporates/General/Corporate Methodology,”Nov.19,2013).It is important to note that information limitations do not permit full application of such methodology.We categorized the corporates into five notional credit risk tiers-“low indebtedness”,“moderatel

89、y low indebtedness”,“moderately high indebtedness”,“high indebtedness”,and cash flow negatives as a proxy for credit risk.The distribution of notional credit risk tiers by geography and sector presented in this article are all debt weighted.In addition,the distribution by region(which includes multi

90、ple geographies)is further reweighted according to each geographys total corporate debt amount reported by Institute of International Finance.Key ratios and thresholds In this exercise,we assess financial risk based on the following ratios:debt-to-EBITDA and FFO-to-debt.EBITDA is earnings before int

91、erest,tax and depreciation and amortization expenses.FFO is funds from operations,which is calculated by deducting net interest expense and tax expense from EBITDA.Debt here is adjusted debt,for which we deduct 75%of cash equivalents from gross debt.All sectors except for real estate and utilities T

92、ier FFO to debt(%)Debt to EBITDA(x)Low indebtedness Greater than 45 Less than 2 Moderately low indebtedness 30-45 2-3 Moderately high indebtedness 20-30 3-4 High indebtedness Less than 20 Greater than 4 Real estate Tier FFO to debt(%)Debt to EBITDA(x)Low indebtedness Greater than 15 Less than 4.5 Mo

93、derately low indebtedness 9-15 4.5-7.5 Moderately high indebtedness 7-9 7.5-9.5 High indebtedness Less than 7 Greater than 9.5 Utilities Tier FFO to debt(%)Debt to EBITDA(x)Low indebtedness Greater than 23 Less than 3 Moderately low indebtedness 13-23 3-4 Moderately high indebtedness 9-13 4-5 High i

94、ndebtedness Less than 9 Greater than 5 Global Debt Leverage:Cash Flow Negative Corporates Could Double In 2023 Dec.12,2022Dec.12,2022 13 Stress scenarios We shock the sample financials for rises in input cost-inflation and interest rates(on floating rate,refinancing,and new debt)in 2023 only.Our fra

95、mework attempts to test the extent of the generalized presumption that input cost inflation and higher interest yields are detrimental to corporate credit quality.Essentially,this study considers the effects of such shocks on the financial risk profiles of corporates,taking account of their presumed

96、 debt-maturity profiles.Input inflation shock We use PPI as a proxy for input cost.Our intermediate stress entails a 150 bp increase in global PPI in 2023 above the baseline,and for the severe stress,300 bp(see chart A1-1).We applied our analytical teams assumptions on input cost pass-through rate b

97、y region and sector,to arrive at net inflation.Chart A1-1 Scenario:Cost Inflation Persists In 2023 Cost change from prior year(%)Chart A1-2 Scenario:Policy Rates Up In 2023 Base interest rate,basis points(bp)These projections are only for this scenario exercise,not for rating assessments.p-Projected

98、.Source:S&P Global Ratings.These projections are only for this scenario exercise,not for rating assessments.p-Projected.Source:S&P Global Ratings.Interest rate shock Our severe interest rate shock in 2023 entails an upward shift of the interest spread curve,averaging 300 bp across credit risk tiers

99、on top of the base case,applying larger increments towards the riskier categories(see chart A2).For the intermediate scenario,our interest spread shock averages 150 bp.The shock is applied on floating rate and maturing debt(see chart A3).We assume that the additional risk premium demanded by investo

100、rs for a given credit risk tier is the same regardless of industry sector,geography,or currency of debt.Tier Incremental spreads vs.2021 median levels Intermediate scenario Incremental spreads vs.2021 median levels Severe scenario 2022 2023 2024 2022 2023 2024 Low indebtedness 31 to 54 87 to 122 29

101、to 51 31 to 54 123 to 155 29 to 51 Moderately low indebtedness 73 183 69 73 244 69 Moderately high indebtedness 88 322 83 88 496 83 High indebtedness 158 to 431 526 to 1053 149 to 407 158 to 431 789 to 1386 149 to 407 -0.6-0.61.0-0.60.91.0-0.62.41.02022 H2p2023p2024pBase caseIntermediateSevere220450

102、425p2023p2024pIncrement over 2021Increment over prior yearGlobal Debt Leverage:Cash Flow Negative Corporates Could Double In 2023 Dec.12,2022Dec.12,2022 14 Chart A2 Scenario:Spreads Shock Props Up Yields In 2023 Percent(%)Chart A3 Debt Maturity Profiles Are Well Spread Assumed global de

103、bt maturity profile(%)This chart shows assumptions for 2023 only.These projections are only for this scenario exercise,not for rating assessments.p-Projected.Source:S&P Global Ratings.Includes rated bonds,loans,and revolving credit facilities.Source:S&P Global Ratings.6.87.38.19.311.819.17.27.68.711

104、.114.422.47.57.99.312.817.025.8AAABBBBBBCCCBase caseIntermediate scenarioSevere scenario62 H22023202420252026 andbeyondGlobal Debt Leverage:Cash Flow Negative Corporates Could Double In 2023 Dec.12,2022Dec.12,2022 15 Copyright 2022 by Standard&Poors Financial Services LLC.All rights reser

105、ved.No content(including ratings,credit-related analyses and data,valuations,model,software or other application or output therefrom)or any part thereof(Content)may be modified,reverse engineered,reproduced or distributed in any form by any means,or stored in a database or retrieval system,without t

106、he prior written permission of Standard&Poors Financial Services LLC or its affiliates(collectively,S&P).The Content shall not be used for any unlawful or unauthorized purposes.S&P and any third-party providers,as well as their directors,officers,shareholders,employees or agents(collectively S&P Par

107、ties)do not guarantee the accuracy,completeness,timeliness or availability of the Content.S&P Parties are not responsible for any errors or omissions(negligent or otherwise),regardless of the cause,for the results obtained from the use of the Content,or for the security or maintenance of any data in

108、put by the user.The Content is provided on an“as is”basis.S&P PARTIES DISCLAIM ANY AND ALL EXPRESS OR IMPLIED WARRANTIES,INCLUDING,BUT NOT LIMITED TO,ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE,FREEDOM FROM BUGS,SOFTWARE ERRORS OR DEFECTS,THAT THE CONTENTS FUNCTIONIN

109、G WILL BE UNINTERRUPTED OR THAT THE CONTENT WILL OPERATE WITH ANY SOFTWARE OR HARDWARE CONFIGURATION.In no event shall S&P Parties be liable to any party for any direct,indirect,incidental,exemplary,compensatory,punitive,special or consequential damages,costs,expenses,legal fees,or losses(including,

110、without limitation,lost income or lost profits and opportunity costs or losses caused by negligence)in connection with any use of the Content even if advised of the possibility of such damages.Credit-related and other analyses,including ratings,and statements in the Content are statements of opinion

111、 as of the date they are expressed and not statements of fact.S&Ps opinions,analyses,and rating acknowledgment decisions(described below)are not recommendations to purchase,hold,or sell any securities or to make any investment decisions,and do not address the suitability of any security.S&P assumes

112、no obligation to update the Content following publication in any form or format.The Content should not be relied on and is not a substitute for the skill,judgment and experience of the user,its management,employees,advisors and/or clients when making investment and other business decisions.S&P does

113、not act as a fiduciary or an investment advisor except where registered as such.While S&P has obtained information from sources it believes to be reliable,S&P does not perform an audit and undertakes no duty of due diligence or independent verification of any information it receives.Rating-related p

114、ublications may be published for a variety of reasons that are not necessarily dependent on action by rating committees,including,but not limited to,the publication of a periodic update on a credit rating and related analyses.To the extent that regulatory authorities allow a rating agency to acknowl

115、edge in one jurisdiction a rating issued in another jurisdiction for certain regulatory purposes,S&P reserves the right to assign,withdraw,or suspend such acknowledgement at any time and in its sole discretion.S&P Parties disclaim any duty whatsoever arising out of the assignment,withdrawal,or suspe

116、nsion of an acknowledgment as well as any liability for any damage alleged to have been suffered on account thereof.S&P keeps certain activities of its business units separate from each other in order to preserve the independence and objectivity of their respective activities.As a result,certain bus

117、iness units of S&P may have information that is not available to other S&P business units.S&P has established policies and procedures to maintain the confidentiality of certain nonpublic information received in connection with each analytical process.S&P may receive compensation for its ratings and

118、certain analyses,normally from issuers or underwriters of securities or from obligors.S&P reserves the right to disseminate its opinions and analyses.S&Ps public ratings and analyses are made available on its Web sites, of charge)and (subscription)and may be distributed through other means,including via S&P publications and third-party redistributors.Additional information about our ratings fees is available at and RATINGSDIRECT are registered trademarks of Standard&Poors Financial Services LLC.