Welcome!

Industrial IoT Authors: Elizabeth White, Stackify Blog, Yeshim Deniz, SmartBear Blog, Liz McMillan

News Feed Item

Morningstar Publishes List of Corporate Bonds to Avoid

CHICAGO, Feb. 20, 2013 /PRNewswire/ -- Morningstar, Inc. (NASDAQ: MORN), a leading provider of independent investment research, today published its quarterly list of "Bonds to Avoid," including analyst commentary about corporate credits.

Morningstar's Bonds to Avoid list represents the debt of companies that its analysts believe are unattractive, based on Morningstar's corporate credit rating and other factors including event risk, such as an impending acquisition, special dividends, or share repurchases; deteriorating fundamentals, including those driving a negative Morningstar® Moat Trend Rating; poor management; or a poor Distance to Default score.

Companies on the list of 18 corporate credits include:

  • Walgreen, Morningstar Corporate Credit Rating BBB
    Morningstar doesn't believe the bond market is adequately pricing in the risks associated with Walgreen's option to purchase the rest of Alliance Boots, which could significantly lever up the balance sheet, or the firm's weakening position in the drug supply chain, which is highlighted by its negative Economic Moat Trend rating.
  • Directv, Morningstar Corporate Credit Rating BBB
    Morningstar believes that management's consistent adherence to a leverage target of 2.5 times EBITDA and the potential for change in the television business over the next several years could cause cash flow and credit metrics to deteriorate, pulling spreads wider still.
  • Pitney Bowes, Morningstar Corporate Credit Rating BBB-
    In late 2011, Morningstar downgraded its credit rating on Pitney Bowes to BBB- following its decision to lower the Economic Moat rating on the company from Narrow to None, and believes that continued investments in Pitney's no-moat business lines may further dilute the company's remaining competitive advantages over time, leading to steadily declining credit fundamentals.

"Our list includes companies in continually declining industries with eroding moats, or competitive advantages, such as Pitney Bowes, to names in which we see meaningful event risk, like Walgreen," said Rick Tauber, Morningstar's director of corporate bond research. "We aim to offer investors an objective assessment of a company's financial health through a unique perspective as our analysts evaluate companies across the credit spectrum. Our list highlights companies that present excessive risk for which we believe investors are not appropriately rewarded."

The company updates its Bonds to Avoid list and commentary quarterly. Morningstar began publishing a list of Bonds to Avoid for corporate credit in August 2012. Morningstar's corporate credit analysts also publish their "Best Ideas" across investment grade, high-yield, and convertible bonds monthly, in addition to new issue notes, credit notes related to earnings and other news, and sector reports across their coverage universe.

Morningstar has about 120 global equity and credit analysts who cover approximately 1,700 companies; 700 of those companies have a corporate credit rating. The company launched corporate credit ratings in 2009, and assigns the ratings on a letter scale from AAA, which indicates extremely low default risk, to D, which indicates payment default.

Morningstar's corporate credit ratings are available on Morningstar.com®, the company's individual investor website. More information about Morningstar's corporate credit research offerings and methodologies are available at http://corporate.morningstar.com/us/asp/subject.aspx?xmlfile=6961.xml. The complete list of 18 Bonds to Avoid in corporate credit is available through Morningstar Select, the company's institutional equity research portal. For access, institutional investors may contact [email protected].  

About Morningstar, Inc.
Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. The company offers an extensive line of products and services for individuals, financial advisors, and institutions. Morningstar provides data on approximately 416,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 9 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its registered investment advisor subsidiaries and has approximately $149 billion in assets under advisement and management as of Dec. 31, 2012. The company has operations in 27 countries.

Morningstar's corporate credit ratings are assigned by equity and credit analysts at Morningstar, Inc., which is not registered as a Nationally Recognized Statistical Rating Organization (NRSRO). Opinions expressed above are subject to change and should not be considered a guarantee or a solicitation to buy or sell securities of any of the above issuers.

©2013 Morningstar, Inc.  All rights reserved.

MORN-R

Media Contact:
Nadine Youssef, +1 312-696-6601 or [email protected]

SOURCE Morningstar, Inc.

More Stories By PR Newswire

Copyright © 2007 PR Newswire. All rights reserved. Republication or redistribution of PRNewswire content is expressly prohibited without the prior written consent of PRNewswire. PRNewswire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

IoT & Smart Cities Stories
DXWorldEXPO LLC announced today that ICOHOLDER named "Media Sponsor" of Miami Blockchain Event by FinTechEXPO. ICOHOLDER gives detailed information and help the community to invest in the trusty projects. Miami Blockchain Event by FinTechEXPO has opened its Call for Papers. The two-day event will present 20 top Blockchain experts. All speaking inquiries which covers the following information can be submitted by email to [email protected] Miami Blockchain Event by FinTechEXPOalso offers sp...
DXWordEXPO New York 2018, colocated with CloudEXPO New York 2018 will be held November 11-13, 2018, in New York City and will bring together Cloud Computing, FinTech and Blockchain, Digital Transformation, Big Data, Internet of Things, DevOps, AI, Machine Learning and WebRTC to one location.
@DevOpsSummit at Cloud Expo, taking place November 12-13 in New York City, NY, is co-located with 22nd international CloudEXPO | first international DXWorldEXPO and will feature technical sessions from a rock star conference faculty and the leading industry players in the world. The widespread success of cloud computing is driving the DevOps revolution in enterprise IT. Now as never before, development teams must communicate and collaborate in a dynamic, 24/7/365 environment. There is no time t...
Headquartered in Plainsboro, NJ, Synametrics Technologies has provided IT professionals and computer systems developers since 1997. Based on the success of their initial product offerings (WinSQL and DeltaCopy), the company continues to create and hone innovative products that help its customers get more from their computer applications, databases and infrastructure. To date, over one million users around the world have chosen Synametrics solutions to help power their accelerated business or per...
When talking IoT we often focus on the devices, the sensors, the hardware itself. The new smart appliances, the new smart or self-driving cars (which are amalgamations of many ‘things'). When we are looking at the world of IoT, we should take a step back, look at the big picture. What value are these devices providing. IoT is not about the devices, its about the data consumed and generated. The devices are tools, mechanisms, conduits. This paper discusses the considerations when dealing with the...
Charles Araujo is an industry analyst, internationally recognized authority on the Digital Enterprise and author of The Quantum Age of IT: Why Everything You Know About IT is About to Change. As Principal Analyst with Intellyx, he writes, speaks and advises organizations on how to navigate through this time of disruption. He is also the founder of The Institute for Digital Transformation and a sought after keynote speaker. He has been a regular contributor to both InformationWeek and CIO Insight...
Machine learning has taken residence at our cities' cores and now we can finally have "smart cities." Cities are a collection of buildings made to provide the structure and safety necessary for people to function, create and survive. Buildings are a pool of ever-changing performance data from large automated systems such as heating and cooling to the people that live and work within them. Through machine learning, buildings can optimize performance, reduce costs, and improve occupant comfort by ...
Digital Transformation is much more than a buzzword. The radical shift to digital mechanisms for almost every process is evident across all industries and verticals. This is often especially true in financial services, where the legacy environment is many times unable to keep up with the rapidly shifting demands of the consumer. The constant pressure to provide complete, omnichannel delivery of customer-facing solutions to meet both regulatory and customer demands is putting enormous pressure on...
Bill Schmarzo, Tech Chair of "Big Data | Analytics" of upcoming CloudEXPO | DXWorldEXPO New York (November 12-13, 2018, New York City) today announced the outline and schedule of the track. "The track has been designed in experience/degree order," said Schmarzo. "So, that folks who attend the entire track can leave the conference with some of the skills necessary to get their work done when they get back to their offices. It actually ties back to some work that I'm doing at the University of San...
CloudEXPO New York 2018, colocated with DXWorldEXPO New York 2018 will be held November 11-13, 2018, in New York City and will bring together Cloud Computing, FinTech and Blockchain, Digital Transformation, Big Data, Internet of Things, DevOps, AI, Machine Learning and WebRTC to one location.