Procurement professionals are in the business of keeping operations running optimally, which is why resilience is a necessity.
Brazil's political corruption scandal has found its way into many executive suites. This ongoing challenge adds to the business headwinds from the country's three-year economic contraction. Debt-laden JBS SA (BVMF: JBSDD3), one of the largest meat processing operators globally, recently sold foreign assets for net proceeds of 960 million Real. Brazilian courts, in an added twist, recently found corruption involvement within its management team, a major overhang for the company.
Public company defaults and restructurings adversely affect commercial creditors more often than one might think. Our FRISK® score gives financial professionals the ability to assess financial risk in real time for a portfolio of public companies. And this score now includes crowdsourced input from the thousands of subscribers using the CreditRiskMonitor service.
Credit scores should include more than just payment data to be accurate and timely. Make sure the score you use includes these innovative, advanced data points.
Moody’s downgraded China’s debt rating from Aa3 (S&P: AA-) to A1 (S&P: A+) in May 2017, given widespread expansion of debt in addition to its expectation of slowing economic growth. Separately, Chinese regulators recently passed a law requiring commercial banks to incorporate proper risk management, governance, and other informational reporting related to loan collateral. These developments—and the growth in off-balance sheet financing in the country—are important indicators that suggest credit risks are expanding in China.
Sears Holdings’ (NYSE: SHLD) financial condition appears more challenged than ever given its mounting debt load, shrinking asset portfolio, and ongoing operating losses. While Sears’ management stated it is seeking $1.25 billion in annualized cost reductions, it’s unclear if the company can actually reduce its large cash burn so significantly. Given the unstable financial picture, now is an important time to evaluate the company’s liquidity, particularly regarding merchandise payables.
Do Fed rate hikes mean financial distress for your portfolio? Assess potential risk in your portfolio with these tools.
SolarWorld AG (ETR: SWVK), one of the largest German-based solar product manufacturers, recently filed for insolvency. Management announced that this unfortunate outcome resulted from ongoing product price erosion, coupled with its cumbersome debt load.
Public company credit risk is more pervasive than you think. Do you know how much is in your portfolio?
A healthy supply chain is key to a sustainable, thriving business model, putting immense pressure on the procurement professional as the first line of defense.