Remember the movie Meet the Parents? Remember how Jack always told Greg that he was watching him, and gave him that stern expression with accompanying hand gesture? Okay, well, in the financial world, being put on “negative watch” is basically the equivalent of Jack telling a company he’s watching its every move. And possibly even giving it the hand gesture.
A “negative watch” means that at least one of the major industrial credit ratings agencies—Fitch’s, Moody’s, Standard & Poor’s—is keeping an eye on a company in order to determine whether or not its credit rating should go down. And 50% of the time, that is exactly what ends up happening.
So what leads an organization to be put on negative watch? Well, maybe they’ve got solvency issues. Maybe they’re underperforming compared to their industry peers. Maybe they’re facing some legal problems that could seriously damage their ability to fulfill their long-term financial debts. Whatever the reason, if a company (or country—they do this to countries too) is placed on negative watch, it means there’s a pretty decent chance their credit rating is going to drop within the next three months.
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Finance: What are the Differences in S&P...27 Views
finance a la shmoop what are the differences in S&P's, and Moody's
ratings? capital letters. really that's about it the assessment of the rating
itself is about the same. the people work at both companies all came from about [grinning men walk in front of a school]
the same schools the same semi diversified backgrounds and well they
all eat the same white bread. note the nomenclature differences here though.
Moody's does in fact look kind of moody with a big fat capital letter in the
beginning followed by small letters and slightly different notations. the S&P is
all in caps all shouting all the time. the metrics behind say a quote highly [chart shown]
speculative bond unquote down here are about the same for both companies but
the slight differences are worth noting so that when you see a rating well you
know just by the way in which it's written who wrote it.
now as for actually understanding bond ratings well that's a different story. to [document shown]
most people they might as well be hieroglyphics. [confused woman reads paper]
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