S&P affirms Babcock & Brown International’s rating
Standard & Poor’s has declared the ratings outlook for Babcock & Brown International (BBI) as stable despite the group’s parent company, Babcock and Brown (BB), reporting a 30 per cent downturn in group net profits and the departure of its chief executive, Phil Green.
The research house had put BBI on ‘CreditWatch with negative implications’ in June but has since affirmed its ‘BB+/B’ rating, saying that the group should be able to keep its bankers on side if it sells some assets, focuses on its core business and works to restore investor confidence.
“The changes in the board and senior management are a positive move for implementing the next stage in the evolution of BB’s, and thus BBI’s, business model,” S&P credit analyst Ian Greer said.
“This change has been and will be assisted by BB’s stoppage of dividends, decline in employee bonuses and planned reductions in debt and staff headcount.”
However, S&P added that the ratings might be lowered if asset sales do not proceed as expected or exposure to Babcock & Brown Power is not reduced.
The ratings may also come under pressure if the company’s franchise is affected by various events such as further financial market volatility or a perceived conflict of interest.
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