Credit’s minefield

The credit outlook for 2003 remains weak and corporates will find it hard to buffer the windsof geopolitical tension, weak equity markets and ratings pressure. Hardeep Dhillon polls 14 credit research teams on their credit bombs for 2003 and outlines the corporates to avoid

Though analysts expect fewer fallen angels and defaults this year than last, the operating environment is still challenging and many company’s financial profiles remain weak. As such the name of the game is still very much avoid the blowups.

The most worrying cases, say analysts, are those companies that need to improve cashflow to repair their balance sheet. If the economy is slow to pick up this year these will be the first casualties. But there are other potential stumbling blocks in 2003.