trending Market Intelligence /marketintelligence/en/news-insights/trending/s608aciucqhkqnclitzmfw2 content
BY CONTINUING TO USE THIS SITE, YOU ARE AGREEING TO OUR USE OF COOKIES. REVIEW OUR
PRIVACY & COOKIE NOTICE
Log in to other products

Login to Market Intelligence Platform

 /


Looking for more?

Contact Us

Request a Demo

You're one step closer to unlocking our suite of comprehensive and robust tools.

Fill out the form so we can connect you to the right person.

  • First Name*
  • Last Name*
  • Business Email *
  • Phone *
  • Company Name *
  • City *

* Required

In this list

REIT Replay: Week-end whimper

Street Talk Episode 40 - Digital Banks Take a Page Out of 'Mad Men'

Broadband Only Homes Skyrocket In 2018 Validating Top MSOs Connectivity Pivot

Power Forecast Briefing: As retirements accelerate, can renewable energy fill the gap?

2019 Credit Risk Perspectives: Is The Credit Cycle Turning? A Fundamentals View


REIT Replay: Week-end whimper

REITs and the broader markets posted losses Friday, Oct. 7, as New York REIT announced that it received more than a dozen proposals from interested parties to serve as its external manager.

The MSCI US REIT Index (RMZ) fell 0.18% to 1,131.38, and the SNL US REIT Equity Index dropped 0.27% to 303.09. The Dow Jones Industrial Average declined 0.15% to close at 18,240.49, while the S&P 500 shed 0.33% to end the day at 2,153.74.

New York REIT disclosed in a Friday release that it received 14 proposals from interested parties to serve as the company's external manager. The independent directors of the company, which expects a new management contract to take effect Dec. 27, reached out to 31 entities with requests for proposals. According to Chairman Randolph Read, the company is "moving forward expeditiously to thoroughly evaluate the proposals."

New York REIT shares fell 0.11%, closing at $9.07.

Just a day after closing its merger with Parkway Properties Inc., Cousins Properties Inc. on Friday completed the spinoff of Houston-focused REIT Parkway Inc., which will trade on the NYSE under the PKY ticker.

Cousins Properties shares closed at $7.57.

Washington Prime Group Inc. said Thursday that it named Lou Conforti to be its permanent CEO, effective immediately. Conforti, who had served in the role on an interim basis since June, will retain his director role.

Washington Prime shares dropped 0.43% to end the day at $11.55.

Also on Thursday, Public Storage said it priced a public offering of 14.0 million depository shares, each representing 0.001 of a 4.90% series E cumulative preferred share of beneficial interest, at $25.00 per depository share. The offering, which is set to close on or about Oct. 14, is expected to fetch the company about $350 million in gross proceeds. Net proceeds will go toward investment in self-storage facilities and in entities that own such facilities, for the development of self-storage facilities and for general corporate purposes.

Public Storage shares edged up 0.38%, closing the day at $212.05.

A National Storage Affiliates Trust joint venture closed its acquisition of the iStorage portfolio consisting of 66 properties spanning about 4.5 million rentable square feet across 12 states for roughly $630 million, according to a Thursday statement. Additionally, the company finalized its purchase of the iStorage property management platform, which includes the iStorage brand, a property management company and a captive insurance company.

Shares of National Storage rose 1.61% to end the day at $19.57.

Raging Capital Management LLC and its chairman, chief investment officer and managing member, William Martin, disclosed beneficial ownership of 2,019,442 shares or 7.9% of Ashford Hospitality Prime Inc.'s outstanding common stock as of Aug. 5. According to a Thursday ownership filing, Raging Capital Management and Martin acquired the shares because they believe that at the time of acquisition, the shares were "undervalued and represented an attractive investment opportunity."

Shares of Ashford Hospitality increased 1.29% to close at $14.14.

Healthcare Trust Inc.'s special strategic review committee of independent directors, and the special committee set up to address conflicts of interest during the review process, completed their evaluations, recommending that the company should keep carrying out its business plan with a focus on managing and strengthening its assets. According to a Thursday filing, the company's board appointed Edward Weil Jr. as a director, replacing William Kahane, who stepped down.

Full Stack Modular LLC acquired the core assets of FC Modular from Forest City Realty Trust Inc. unit Forest City Ratner Cos. for undisclosed terms. According to a Thursday statement, the sale, which allows Forest City Ratner to focus on its core strengths of managing its assets and development pipeline, covers the long-term lease at the Brooklyn Navy Yard in New York, all equipment and intellectual property, and the bespoke technology developed for high-rise modular construction.

Shares of Forest City fell 1.05%, closing at $21.60.

Now featured on S&P Global Market Intelligence

The Week in US Real Estate: Taking the reins; the REIT stuff: The Oct. 7 weekly news roundup in the North American real estate space features shareholder and various other entities' attempts to manage a company taking the liquidation route, as well as potential new players in the REIT space.

Data Dispatch: 10,000+ REIT-owned properties near Hurricane Matthew's path: Single-family REITs have the greatest exposure to the storm's path, with more than 7,000 homes in the affected area.

Data Dispatch: Deal spike in Q3 shakes up REIT M&A league tables: New leaders in the financial adviser rankings by deal value and deal count emerged after an active quarter in REIT M&A.

Data Dispatch: Bank of America Merrill Lynch takes 2016 lead among real estate equity underwriters: As of the end of the third quarter, the firm was second for the year among real estate debt underwriters, behind J.P. Morgan Securities.

Best of SNL: Real Estate, editors' picks: Our real estate editors' picks for the best stories of the week ending Oct. 7.

Best of SNL: Real estate, most read: The 10 most read real estate articles for the week ending Oct. 7.

SNL Q3'16 M&A League Tables: SNL Financial on Oct. 7 released third-quarter 2016 M&A league tables for its covered North American sectors.

SNL Q3'16 Capital Markets League Tables: SNL Financial on Oct. 7 released third-quarter 2016 capital markets league tables for its covered North American sectors.

Real Estate Rundown: HCP spinoff issues debt on time, but pays for its tenant's troubles: The company, which is coming into existence largely as a way of removing properties linked to tenant HCR ManorCare from HCP's portfolio, issued debt at notably high rates in a series of recent transactions.

The Property Ledger: Tanger breaks ground on Texas outlet center; WPT Industrial targets 2 US assets: The Oct. 7 edition of the North American property news roundup also features DCT Industrial's purchase of an Ohio building, among other transactions.

Market prices and index values are current as of the time of publication and are subject to change.


Listen: Street Talk Episode 40 - Digital Banks Take a Page Out of 'Mad Men'

Mar. 20 2019 — Some fintech companies are making hay with digital platforms that tout their differences with banks, even though they are often offering virtually the same products. In the episode, we discuss with colleagues Rachel Stone and Kiah Haslett the deposit strategies employed by the likes of Chime, Aspiration and other incumbent players such as Ally Financial, Discover and Capital One. Those efforts conjure up memories of a Don Draper pitch in Mad Men and likely will enjoy continued success.

Learn more about Market Intelligence
Request Demo

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 the prior written permission of Standard & Poor's Financial Services LLC or its affiliates (collectively, S&P).


Technology, Media & Telecom
Broadband Only Homes Skyrocket In 2018 Validating Top MSOs Connectivity Pivot

Highlights

The segment stood at an estimated 23.6 million as of Dec. 31, 2018, accounting for 24% of all wireline high-speed data homes.

The following post comes from Kagan, a research group within S&P Global Market Intelligence.

To learn more about our TMT (Technology, Media & Telecommunications) products and/or research, please request a demo.

Mar. 20 2019 — The U.S. broadband-only home segment logged its largest net adds on record in 2018, validating Comcast Corp.'s and Charter Communications Inc.'s moves to make broadband, or connectivity, the keystone of their cable communication businesses.

The size and momentum of the segment also put in perspective the recent high-profile online-video video announcements by the top two cable operators as well as AT&T Inc.'s WarnerMedia shake-up and plans to go toe-to-toe with Netflix in the subscription video-on-demand arena in the next 12 months.

We estimate that wireline broadband households not subscribing to traditional multichannel, or broadband-only homes, rose by nearly 4.3 million in 2018, topping the gains from the previous year by roughly 22%. Overall, the segment stood at an estimated 23.6 million as of Dec. 31, 2018, accounting for 24% of all wireline high-speed data homes.

For perspective, broadband-only homes stood at an estimated 11.3 million a mere four years ago, accounting for 13% of residential cable and telco broadband subscribers.

The once all-powerful, must-have live linear TV model, which individuals and families essentially treated as a utility upon moving into a new residence, increasingly is viewed as too expensive and unwieldy in the era of affordable, nimble internet-based video alternatives. This has resulted in a sizable drop in penetration of occupied households.

As a result, continued legacy cord cutting is baked in and broadband-only homes are expected to continue to rise at a fast clip, with the segment's momentum in the next few years compounded by Comcast's, Charter's and AT&T's ambitious moves into online-video territory.

Note: we revised historical broadband-only home estimates as part of our fourth-quarter 2018, following restatements of historical telco broadband subscriber figures and residential traditional multichannel subscriber adjustments.

Learn more about Market Intelligence
Request Demo

Q4'18 multichannel video losses propel full-year drop to edge of 4 million

Learn more

Q4'18 multiproduct analysis sheds more light on video's fall from grace

Learn more

Watch: Power Forecast Briefing: As retirements accelerate, can renewable energy fill the gap?

Mar. 19 2019 — Steve Piper shares the outlook for U.S. power markets, discussing capacity retirements and whether continued development of wind and solar power plants may mitigate the generation shortfall.

Learn more about Market Intelligence
Request Demo

Credit Analysis
2019 Credit Risk Perspectives: Is The Credit Cycle Turning? A Fundamentals View

Mar. 15 2019 — On November 20, 2018, a joint event hosted by S&P Global Market Intelligence and S&P Global Ratings took place in London, focusing on credit risk and 2019 perspectives.

Pascal Hartwig, Credit Product Specialist, and I provided a review of the latest trends observed across non-financial corporate firms through the lens of S&P Global Market Intelligence’s statistical models.1 In particular, Pascal focused on the outputs produced by a statistical model that uses market information to estimate credit risk of public companies; if you want to know more, you can visit here.

I focused on an analysis of how different Brexit scenarios may impact the credit risk of European Union (EU) private companies that are included on S&P Capital IQ platform.

Before, this, I looked at the evolution of their credit risk profile from 2013 to 2017, as shown in Figure 1. Scores were generated via Credit Analytics’ PD Model Fundamentals Private, a statistical model that uses company financials and other socio-economic factors to estimate the PD of private companies globally. Credit scores are mapped to PD values, which are based on/derived from S&P Global Ratings Observed Default Rates.

Figure 1: EU private company scores generated by PD Model Fundamentals Private, between 2013 and 2017.

Source: S&P Global Market Intelligence.2 As of October 2018.

For any given year, the distribution of credit scores of EU private companies is concentrated below the ‘a’ level, due to the large number of small revenue and unrated firms on the S&P Capital IQ platform. An overall improvement of the risk profile is visible, with the score distribution moving leftwards between 2013 and 2017. A similar picture is visible when comparing companies by country or industry sector,3 confirming that there were no clear signs of a turning point in the credit cycle of private companies in any EU country or industry sector. However, this view is backward looking and does not take into account the potential effects of an imminent and major political and economic event in the (short) history of the EU: Brexit.

To this purpose, S&P Global Market Intelligence has developed a statistical model: the Credit Analytics Macro-scenario model enables users to study how potential future macroeconomic scenarios may affect the evolution of the credit risk profile of EU private companies. This model was developed by looking at the historical evolution of S&P Global Ratings’ rated companies under different macroeconomic conditions, and can be applied to smaller companies after the PD is mapped to a S&P Global Market Intelligence credit score.

“Soft Brexit” (Figure 2): This scenario is based on the baseline forecast made by economists at S&P Global Ratings and is characterized by a gentle slow-down of economic growth, a progressive monetary policy tightening, and low yet volatile stock-market growth.4

Figure 2: “Soft Brexit” macro scenario.5

Source: S&P Global Ratings Economists. As of October 2018.

Applying the Macro-scenario model, we analyze the evolution of the credit risk profile of EU companies over a three-year period from 2018 to 2020, by industry sector and by country:

  • Sector Analysis (Figure 3):
    • The median credit risk score within specific industry sectors (Aerospace & Defense, Pharmaceuticals, Telecoms, Utilities, and Real Estate) shows a good degree of resilience, rising by less than half a notch by 2020 and remaining comfortably below the ‘b+’ threshold.
    • The median credit score of the Retail and Consumer Products sectors, however, is severely impacted, breaching the high risk threshold (here defined at the ‘b-’ level).
    • The remaining industry sectors show various dynamics, but essentially remain within the intermediate risk band (here defined between the ‘b+’ and the ‘b-’ level).

Figure 3: “Soft Brexit” impact on the median credit risk level of EU private companies, by industry.

Source: S&P Global Market Intelligence. As of October 2018.

  • Country Analysis (Figure 4):
    • Although the median credit risk score may not change significantly in certain countries, the associated default rates need to be adjusted for the impact of the credit cycle.6 The “spider-web plot” shows the median PD values for private companies within EU countries, adjusted for the credit cycle. Here we include only countries with a minimum number of private companies within the Credit Analytics pre-scored database, to ensure a robust statistical analysis.
    • Countries are ordered by increasing level of median PD, moving clock-wise from Netherlands to Greece.
    • Under a soft Brexit scenario, the PD of UK private companies increases between 2018 and 2020, but still remains below the yellow threshold (corresponding to a ‘b+’ level).
    • Interestingly, Italian private companies suffer more than their Spanish peers, albeit starting from a slightly lower PD level in 2017.

Figure 4: “Soft Brexit” impact on the median credit risk level of EU private companies, by country.

Source: S&P Global Market Intelligence. As of October 2018.

“Hard Brexit” (Figure 5): This scenario is extracted from the 2018 Stress-Testing exercise of the European Banking Authority (EBA) and the Bank of England.7 Under this scenario, both the EU and UK may go into a recession similar to the 2008 global crisis. Arguably, this may seem a harsh scenario for the whole of the EU, but a recent report by the Bank of England warned that a disorderly Brexit may trigger a UK crisis worse than 2008.8

Figure 5: “Hard Brexit” macro scenario.9

Sources:”2018 EU-wide stress test – methodological note” (European Banking Authority, November 2017) and “Stress Testing the UK Banking system: 2018 guidance for participating banks and building societies“ (Bank of England, March 2018).

Also in this case, we apply the Macro-scenario model to analyze the evolution of the credit risk profile of EU companies over the same three-year period, by industry sector and by country:

  • Sector Analysis (Figure 6):
    • Despite all industry sectors being severely impacted, the Pharmaceuticals and Utilities sectors remain below the ‘b+’ level (yellow threshold).
    • Conversely, the Airlines and Energy sectors join Retail and Consumer Products in the “danger zone” above the ‘b-’ level (red threshold).
    • The remaining industry sectors will either move into or remain within the intermediate risk band (here defined between the ‘b+’ and the ‘b-’ level).

Figure 6: “Hard Brexit” impact on the median credit risk level of EU private companies, by industry.

Source: S&P Global Market Intelligence. As of October 2018.

Learn more about Credit Analysis
Click Here

  • Country Analysis (Figure 7):
    • Under a hard Brexit scenario, the PD of UK private companies increases between 2017 and 2020, entering the intermediate risk band and suffering even more than its Irish peers.
    • Notably, by 2020 the French private sector may suffer more than the Italian private sector, reaching the attention threshold (here shown as a red circle, and corresponding to a ‘b-’ level).
    • While it is hard to do an exact like-for-like comparison, it is worth noting that our conclusions are broadly aligned with the findings from the 48 banks participating in the 2018 stress-testing exercise, as recently published by the EBA:10 the major share of 2018-2020 new credit risk losses in the stressed scenario will concentrate among counterparties in the UK, Italy, France, Spain, and Germany (leaving aside the usual suspects, such as Greece, Portugal, etc.).

Figure 7: “Hard Brexit” impact on the median credit risk level of EU private companies, by country.

Source: S&P Global Market Intelligence. As of October 2018.

In conclusion: In Europe, the private companies’ credit risk landscape does not yet signal a distinct turning point, however Brexit may act as a pivot point and a catalyst for a credit cycle inversion, with an intensity that will be dependent on the Brexit type of landing (i.e., soft versus hard).

1 S&P Global Ratings does not contribute to or participate in the creation of credit scores generated by S&P Global Market Intelligence.
2 Lowercase nomenclature is used to differentiate S&P Global Market Intelligence credit scores from the credit ratings issued by S&P Global Ratings.
3 Not shown here.
4 Measured via Gross Domestic Product (GDP) Growth, Long-term / Short-term (L/S) European Central Bank Interest Rate Spread, and FTSE100 or STOXX50 stock market growth, respectively.
5 Macroeconomic forecast for 2018-2020 (end of year) by economists at S&P Global Ratings; the baseline case assumes the UK and the EU will reach a Brexit deal (e.g. a “soft Brexit”).
6 When the credit cycle deteriorates (improves), default rates are expected to increase (decrease).
7 Source: “2018 EU-wide stress test – methodological note” (EBA, November 2017) and “Stress Testing the UK Banking system: 2018 guidance for participating banks and building societies”. (Bank of England, March 2018).
8 Source: “EU withdrawal scenarios and monetary and financial stability – A response to the House of Commons Treasury Committee”. (Bank of England, November 2018).
9 As a hard Brexit scenario, we adopt the stressed scenario included in the 2018 stress testing exercise and defined by the EBA and the Bank of England.
10 See, for example, Figure 18 in “2018 EU-Wide Stress Test Result” (EBA November 2018), found at:https://eba.europa.eu/documents/10180/2419200/2018-EU-wide-stress-test-Results.pdf

Learn more about Market Intelligence
Request Demo

2019 Credit Risk Perspectives: Is The Credit Cycle Turning? A Market-Driven View

Learn More