The Stable Outlook
is assigned because, with the significant buildup of parity for the senior notes, the ratings are expected to remain stable for the next two years.
The segment outlooks
summarized above are based on a top-down analysis of economic forces.
In the Household Products and Personal Care segment, a medium term trend of declining margins led to Negative Outlooks
for several names.
The impact of any re-surfacing of HPAI in 2007 will be monitored closely for its impact on poultry processors, and ratings outlook
changes or downgrades are possible depending on the severity and length of the outbreak.
Risks to the outlook
include supply chain constraints and event risk (terrorism, disease, etc.
As in the previous reports, the emerging markets continue to show a greater level of rating volatility, with the overall level of stable outlooks
falling back to 75% in Q3 06, having trended upwards since Q4 05.
Foreign currency IDR upgraded to 'BBB-' Rating Outlook
Stable, from 'BB+' Rating Outlook
Additionally, three states (Louisiana, Michigan and Illinois) were assigned Negative Rating Outlooks
and only one state (California) was assigned a Positive Rating Outlook
in conjunction with Fitch's first-time formal assignments of rating outlooks
for state general obligation credits in April.
The report contains additional explanations of the Rating Outlooks
and a credit summary for each state.
Looking to 2005, it is expected that the majority of rating actions will consist of affirming existing ratings and maintaining Stable Outlooks
The Negative Rating Outlook
of PHI reflects the uncertain prospects for reducing parent debt over the next couple of years.
Thus, while the diversified energy segment carries mostly Stable Outlooks
, the median rating has fallen to the 'B-' category during 2003, implying a one-in-three likelihood of default over five years.