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1、,Credit,GlobalMarketsResearch,EmergingMarkets,Global22 October 2012,Emerging Market CorporatesCorporate credit trends-fairlyrobust/challenges emergeQuarterly Credit Ratio Trends:by region and sectorIn this publication,we analyse the historic trends for some of the main credit ratiosthat have defined
2、 the fundamental performance of CEEMEA and LatAmcorporates,with the purpose of understanding how resilient the companies acrossindustry sectors have been in the most recent downturn of the global commodityprices and macroeconomic trends versus the previous instance in 2008/09.Figure1 below implies t
3、hat CEEMEA industrials currently are fairing better than theirLatAm peers in terms of net leverage;though we highlight that this is not a sector-wide trend and that the full picture can only be ascertained by examining theevolution of a complete spectrum of ratios,as we do in the body of this report
4、.Financing Needs:corporates quarterly FRR trendsWe provide an overview of the evolution of global corporate and banking financingrequirements(FRRs)across CEEMEA and LatAm.We believe that the FRRs havebeen very useful,dependable indicators of corporate financing needs,in focusingon the degree of sust
5、ainability of individual corporate,and aggregated sectorscash flow cycles and therefore at highlighting the sectors that could need to cutspending or raise new funding in the near-term.Credit ratings structure and outlook for EM;commodities overview includedFigure 1:LTM Net Leverage historic trend f
6、or EM corporates2.01.81.61.41.21.00.80.6,PeriodicalResearch TeamDenis ParisienResearch Analyst(+1)212 250-Viacheslav Shilin,MBAResearch Analyst(+44)20 754-Tala BoulosResearch Analyst(+44)20 754-Natalia CorfieldResearch Analyst(+1)212 Jed EvansStrategist(+1)212 250-,3Q08,2Q09,1Q10,4Q10,3Q11,2Q12,EMEA
7、,GLOBAL,LATAM,Source:Deutsche BankFigure 2:Capital adequacy ratio(CAR)historic trend for EM banks22%20%18%16%14%,4Q07,3Q08,2Q09,1Q10,4Q10,3Q11,2Q12,EMEA,GLOBAL,LATAM,Source:Deutsche BankDeutsche Bank Securities Inc.All prices are those current at the end of the previous trading session unless otherw
8、ise indicated.Prices are sourced from localexchanges via Reuters,Bloomberg and other vendors.Data is sourced from Deutsche Bank and subject companies.DeutscheBank does and seeks to do business with companies covered in its research reports.Thus,investors should be aware that the firmmay have a confl
9、ict of interest that could affect the objectivity of this report.Investors should consider this report as only a singlefactor in making their investment decision.DISCLOSURES AND ANALYST CERTIFICATIONS ARE LOCATED IN APPENDIX 1.MICA(P)072/04/2012.,22 October 2012Page 2,Emerging Market CorporatesTable
10、 of ContentsGlobal financing needs.3Main conclusions.3Global credit trends overview.8EM Corporates.8Consumer&Food.12Metals&Mining.13Oil&Gas.14Technology,Media and Telecom.14Utilities.15EM Banks.16Commodity views.18Commodity Price Forecasts.19Credit ratings trends by industry.21Credit ratings outlook
11、.23Deutsche Bank Securities Inc.,22 October 2012,Emerging Market CorporatesGlobal financing needsMain conclusionsIn this section we provide an overview of the evolution of global corporate and bankingfinancing requirements(FRRs)across CEEMEA and LatAm.We introduced these ratios andhave been using th
12、em as one of our principal analytical tools within our global sector analysisplatform in January 2011.We believe that the FRRs have been very useful,dependableindicators corporate financing needs,in focusing on the degree of sustainability of individualcorporate,and aggregated sectors cash flow cycl
13、es in the context of their constantlyevolving credit metric trends.We present in chart format and discuss highlights of some ofthe principal credit trends that we track,and that feed into the FRR ratios in this report andcontrast the recent evolution of these ratios compared to their past level,and
14、we comparethe recent data on a cross-sectional basis,contrasting deep cyclical industry ratios versusless cyclical sectors.Below we provide the main conclusions that we have made followingour observations,with a recap on the actual Financing Requirement Ratio formulae for thecorporate and banking en
15、tities.We note that a breakdown of sector FRRs by individualcompany is provided and discussed in our recent EM corporate quarterly report(see“Emerging Market Corporates:reflation,consolidation and the slow,bumpy grind”on Oct 1,2012)Corporate FRR=(ST debt+LTM gross interest expense)/(Cash on the bala
16、nce sheet+LTM EBITDA LTM net capex LTM dividends LTM taxes paid LTM change inworking capital LTM net acquisitions)40 LatAm and 39 CEEMEA corporates are included in the calculation.The main reasonfor the greater FRR of LatAm corporates appears to be their higher ST debt+interestexpense with the avera
17、ge of USD1.7bn per company and cumulative level ofUSD67.4bn compared to CEEMEA average of USD1.1bn per company and cumulativevolume of USD46.4bn.Net cash and retainable cash flow(i.e.the denominator in the FRR ratio which includescash,LTM EBITDA,capex etc)is high for CEEMEA compared to LatAm.Average
18、 cashavailability for CEEMEA is USD1.4bn compared to LatAm average of USD1.1bn.Cumulative cash availability for CEEMEA corporates is USD54.2bn vs.USD46.9bn forLATAM corporates.Although the average cash balance and EBITDA is higher for LatAm than for CEEMEAcredits,it is negated by higher Capex and ac
19、quisitions and working capitalrequirements for LatAm vs.CEEMEA.EBITDA margins are declining in LatAm at arelatively steep pace albeit from a relatively high level while capex/sales ticked up inthe most recent quarter and leverage started to increase from a relatively low level.CEEMEAs capex/sales co
20、ntinued its slide and slipped significantly below the LatAmratio helping explain the divergence in FRRs.On a regional basis,we expect the CEEMEAs FRR to continue creeping upwardstowards 1x,though we expect it to remain slightly below that mark,mainly driven by ourview of improving cash flow dynamics
21、 for the Russian Oil although weexpect the ratio to rise slightly in 2H12 mainly driven by capex cycle in CEEMEA.This,Deutsche Bank Securities Inc.,Page 3,22 October 2012Page 4,Emerging Market Corporatescould be at least partially offset by the positive seasonality of Brazilian protein companiesin 4
22、Q and by some refinancing/maturity extensions that we expect in this regions sectorparticipants.There is risk however of heavy WC usage in the US operations of LatAmcompanies,exposed to high grain prices/raw material scarcity.The gradual increase of the FRR for the TMT sector since mid-2011 is,in ou
23、r view,areflection of continued M while cumulative net cash flow declined to USD177.4bn in 2Q12 fromUSD238.2bn a year earlier much more gradual changes.In our view,the pace of growth of the CEEMEA bank FRR ratio in 2H12 should abatefollowing the surge in new bond supply in October-to-date,which shou
24、ld help smoothout the above-mentioned ST debt repayments.More new issues are also expected fromLatAm banks in the run-up to the application of Basel III and in the wake of other capitalmarkets transactions.Deutsche Bank Securities Inc.,1Q10,2Q10,3Q10,4Q10,1Q11,2Q11,3Q11,4Q11,1Q12,1Q10,2Q10,3Q10,4Q10
25、,1Q11,2Q11,3Q11,4Q11,1Q12,2Q12,2Q12,22 October 2012,Emerging Market CorporatesFigure 3:Quarterly FRR by sector43210,Cement Construction&Real Estate,TMT,Utilities,Consumer&Food,*The FRR for Cement,Construction and Real Estate in 1Q10,2Q10 and 3Q10 was 9.0,8.8 and-12.1 respectively.Source:Deutsche Ban
26、kFigure 4:Quarterly FRR by sector without working capital changes2.01.61.20.80.40.0,Consumer&Food,TMT,Utilities,Cement Construction&Real Estate,Source:Deutsche Bank,Deutsche Bank Securities Inc.,Page 5,1Q10,2Q10,3Q10,4Q10,1Q11,2Q11,3Q11,4Q11,1Q12,1Q10,2Q10,3Q10,4Q10,1Q11,2Q11,3Q11,4Q11,1Q12,2Q12,2Q1
27、2,22 October 2012,Emerging Market CorporatesFigure 5:Quarterly FRR by sector(Deep Cyclical)2.01.51.00.50.0,Oil,Gas&Petrochemicals,Pulp&Paper,Metals&Mining,Source:Deutsche BankFigure 6:Quarterly FRR per Region(Non-Banks)1.81.61.41.21.00.80.60.4,Page 6,Source:Deutsche Bank,LATAM,EMEA,GlobalDeutsche Ba
28、nk Securities Inc.,2Q11,3Q11,4Q11,1Q12,2Q12,22 October 2012,Emerging Market CorporatesFigure 7:Quarterly FRR per Region(Banks)4.03.53.02.52.01.51.00.50.0,Deutsche Bank Securities Inc.,Source:Deutsche Bank,EMEA,Global,LATAM,Page 7,22 October 2012Page 8,Emerging Market CorporatesGlobal credit trends o
29、verviewEM CorporatesLeverageNet leverage in CEEMEA has been steadily declining since 2Q11 and is now back to thelow levels last seen in 3Q08.During the previous crisis,CEEMEA corporates suffered toa greater extent than their LatAm peers,with average leverage peaking above 4x asEBITDA margins plummet
30、ed.This was particularly the case for the deeply cyclical M though low capex should to someextent provide a buffer.The main culprits behind this reduced cash generating capacitythat started in 4Q11 were the Oil&Gas and Utilities segments.For the latter,the declineis from a high base though of+40%.CE
31、EMEA Oil&Gas credits,mostly Russian,suffered from currency appreciation and the negative export duty lag costs that directlyDeutsche Bank Securities Inc.,22 October 2012,Emerging Market Corporateshit the EBITDA lines.On a more positive note,cash coverage of ST debt hit a historicalhigh(above 3.5x)in
32、 2Q12.In LatAm,the compression of EBITDA margins has not been limited to the deep cyclicalsectors TMT and utilities sectors for example have been facing their ownsector/regional specific idiosyncratic issues such as technology convergence,competition,tariff hurdles,inability to pass through higher c
33、osts etc.The LatAm food andoil and gas industries have range bound,with the most recent derection in food marginsbeing higher and the most recent trend in O&G being lower.Higher beef operatingmargins in the Brazilian protein sector are being held back somewhat by more difficultconditions for beef in
34、 the US and for poultry and pork globally due to higher grain prices.LatAm O&G industry margins have been weighed down by a relatively weakperformance YTD in Brazil and Argentina compared to relatively stable margins inColombia and Mexico.LiquidityIn aggregate companies on both sides of the Atlantic
35、 fared considerably better in themost recent more moderate downturn in the global economy and in commodity pricesvs.2008-09 in terms of managing liquidity.We measure liquidity using cash/ST debt.We believe this is at least in part due to QE and the impact on the new issue marketopenness and positive
36、 market technicals in general.On a comparative basis,despitestructurally weaker cash/ST-Debt liquidity metrics CEEMEA credits have maintainedrelatively stronger FRR trends since we began tracking the latter in 1Q10.Interestingly,metals&mining and oil&gas,both being deeply cyclical sectors,have been
37、theweakest and the strongest links in the historic liquidity trend,respectively.Moredisciplined capex,M&A,and improved working capital management,combined with thebetter access to long-term funding for oil&gas companies in the past two years havebeen the main reasons for the improvement in both cash
38、/ST debt and net leverageratios.As to the metals&mining peers,which still face relatively higher refinancing risksand pressure on credit ratios,it is not unreasonable to assume that these pressurescould ease somewhat for mining companies somewhat in 3Q12 following the mostrecent positive correction
39、in iron ore and,albeit less prominent,in coking coal prices,asChinese restocking appears to have improved the supply-demand balance more recently.The cash/ST debt trends for LatAm industrials are virtually identical to CEEMEA,but theratio level is consistently higher throughout the period.This stems
40、 largely from thecommon practice among LatAm,particularly Brazilian companies to maintain high cashcushions as a bulwark against historically volatile national economic financial andeconomic conditions,in our view.Though economic/financial policy frameworks haveimproved over the past decade and a ha
41、lf,the drying up of bank liquidity and shut downof capital markets in 2008-2009 served as a reminder that precautionary cushions canserve a purpose in uncertain times,particularly for deep cyclical that have volatileoperating cash flow generation over the cycle.The high volatility in the LatAm TMTse
42、ctor liquidity reflects the consolidation of Telmex into AMX financial statements in1Q10 driving cash materially higher and ST debt materially lower on a one time basis andthen normalizing after that event was absorbed into the LTM data.,Deutsche Bank Securities Inc.,Page 9,3Q08,4Q08,1Q09,2Q09,3Q09,
43、4Q09,1Q10,2Q10,3Q10,1Q11,2Q11,4Q11,1Q12,3Q08,4Q08,1Q09,2Q09,3Q09,1Q10,2Q10,4Q10,1Q11,3Q11,4Q11,1Q12,1Q12,4Q07,1Q08,2Q08,3Q08,4Q08,2Q09,3Q09,1Q10,2Q10,4Q10,1Q11,2Q11,3Q11,4Q11,1Q12,2Q12,4Q07,1Q08,3Q08,4Q08,1Q09,2Q09,3Q09,4Q09,1Q10,2Q10,3Q10,1Q11,2Q11,4Q11,1Q09,4Q09,3Q10,2Q08,4Q10,3Q11,3Q08,4Q08,1Q09,
44、2Q09,3Q09,4Q09,1Q10,2Q10,3Q10,4Q10,1Q11,2Q11,3Q11,4Q11,1Q12,2Q12,3Q08,4Q08,1Q09,2Q09,3Q09,4Q09,1Q10,2Q10,3Q10,4Q10,1Q11,2Q11,3Q11,4Q11,1Q12,2Q12,2Q12,2Q12,4Q10,3Q11,2Q12,4Q09,3Q10,2Q11,22 October 2012,Emerging Market Corporates,Figure 8:Cash/ST debt by region2.62.11.6,Figure 9:Leverage by region1.81
45、.61.41.2,1.01.10.8,0.6,0.6,EMEA,GLOBAL,LATAM,EMEA,GLOBAL,LATAM,Source:Deutsche BankFigure 10:Capex/Sales by region30%25%20%15%10%5%,Source:Deutsche BankFigure 11:EBITDA Margin by region45%40%35%30%25%20%,EMEA,GLOBAL,LATAM,EMEA,GLOBAL,LATAM,Source:Deutsche BankFigure 12:Cash/St debt by sector,Source:
46、Deutsche BankFigure 13:Cash/St debt by sector(Deep Cyclical),2.52.01.51.00.50.0,7.06.05.04.03.02.01.00.0,3.02.52.01.51.00.5,Consumer&Food,Cement Construction&Real Estate,Utilities,TMT(RHS),Metals&Mining,Oil&Gas,Pulp&Paper,Source:Deutsche BankPage 10,Source:Deutsche Bank,Deutsche Bank Securities Inc.
47、,3Q08,4Q08,1Q09,2Q09,3Q09,4Q09,1Q10,2Q10,3Q10,4Q10,1Q11,2Q11,3Q11,4Q11,1Q12,2Q12,3Q08,4Q08,1Q09,2Q09,3Q09,4Q09,1Q10,2Q10,3Q10,4Q10,1Q11,2Q11,3Q11,4Q11,1Q12,2Q12,3Q08,4Q08,1Q09,2Q09,3Q09,4Q09,1Q10,2Q10,3Q10,4Q10,1Q11,2Q11,3Q11,4Q11,1Q12,2Q12,3Q08,4Q08,1Q09,2Q09,3Q09,4Q09,1Q10,2Q10,3Q10,4Q10,1Q11,2Q11
48、,3Q11,4Q11,1Q12,2Q12,3Q08,4Q08,1Q09,2Q09,3Q09,4Q09,1Q10,2Q10,3Q10,4Q10,1Q11,2Q11,3Q11,4Q11,1Q12,3Q08,4Q08,1Q09,2Q09,3Q09,4Q09,1Q10,2Q10,3Q10,4Q10,1Q11,2Q11,3Q11,4Q11,1Q12,2Q12,2Q12,22 October 2012,Emerging Market Corporates,Figure 14:Net Leverage by sector,Figure 15:Net Leverage by sector(Deep Cycli
49、cal),6.25.44.63.83.02.21.40.6,2.52.01.51.00.50.0,7.06.05.04.03.02.01.00.0,Consumer&Food,TMT,Utilities,Cement Construction&Real Estate,Metals&Mining,Oil&Gas,Pulp&Paper(RHS),Source:Deutsche BankFigure 16:Capex/Sales by sector,Source:Deutsche BankFigure 17:Capex/Sales by sector(Deep Cyclical),45%40%35%
50、30%25%20%15%10%5%0%,30%25%20%15%10%5%,45%40%35%30%25%20%15%10%5%0%,Cement Construction&Real Estate,TMT,Utilities,Consumer&Food,Oil&Gas,Metals&Mining,Pulp&Paper(RHS),Source:Deutsche BankFigure 18:EBITDA Margin by sector45%40%35%30%25%20%15%10%5%0%,Source:Deutsche BankFigure 19:EBITDA Margin by sector
