{"id":569,"date":"2007-02-08T17:42:15","date_gmt":"2007-02-08T21:42:15","guid":{"rendered":"http:\/\/www.prefblog.com\/?p=569"},"modified":"2007-02-08T17:42:15","modified_gmt":"2007-02-08T21:42:15","slug":"wnpra-wnprb-wnprc-wnprd-wnpre-sp-credit-watch-negative","status":"publish","type":"post","link":"https:\/\/prefblog.com\/?p=569","title":{"rendered":"WN.PR.A \/ WN.PR.B \/ WN.PR.C \/ WN.PR.D \/ WN.PR.E : S&P Credit Watch Negative"},"content":{"rendered":"

These issues are currently rated P-2(low) by Standard & Poors<\/a>, which today placed them on Credit Watch Negative:<\/p>\n

At the same time, Standard & Poor’s placed its ratings, including its ‘BBB+’ long-term corporate credit rating, on parent company George Weston Ltd. on CreditWatch with negative implications.
\n\u00a0\u00a0\u00a0\u00a0 “The CreditWatch placement reflects the magnitude of challenges faced by Loblaw,” said Standard & Poor’s credit analyst Don Povilaitis. These challenges include substantially lower profitability, supply chain difficulties, significant senior management changes, a new corporate structure which involves substantially reducing the number of employees at head office, and a material goodwill impairment charge.<\/p>\n

…
\nThe ratings on Loblaw and George Weston, which has a 62% equity interest in Loblaw, are linked and jointly influenced by the respective credit profiles. The ratings on the two companies are likely to move in tandem, as Loblaw represents a significant portion of George Weston’s revenues and earnings, and is therefore a key driver of George Weston’s overall performance.<\/p><\/blockquote>\n

This is due to Loblaw’s announcement<\/a> of lower earnings and goodwill impairment:<\/p>\n

Basic net earnings per common share for the fourth quarter, before taking into account a charge with respect to an expected goodwill impairment, were $0.16 compared to $0.73 in 2005. For the year, basic net earnings per common share, before taking into account a charge with respect to an expected goodwill impairment, were $2.12 compared to $2.72 in 2005.
\n\u00a0\u00a0\u00a0 The Company has performed its annual goodwill impairment test analysis. Based on this analysis, it is anticipated that the carrying value of the $1.5 billion of goodwill associated with the acquisition of the Provigo business in 1998 is impaired. As a result, the Company expects to record in the fourth quarter an initial estimate of a goodwill impairment charge, which the Company estimates to be in the range of $600 million to $900 million, in its audited consolidated financial statements for the year ended December 30, 2006. This is a non-cash charge that is expected to be finalized and adjusted as necessary in the first half of 2007. This expected charge will result in a negative impact to basic net earnings per common share for the fourth quarter and the full year of $2.19 to $3.28 per share. After the impact of this charge, the Company expects to record a basic net loss per common share in the range of $2.03 to $3.12 in the fourth quarter. For the year, after the impact of this charge, the Company expects a basic net loss per common share in the range of $0.07 to $1.16.<\/p><\/blockquote>\n

There has as yet been no announcement from DBRS<\/a>, which rates the issues at Pfd-2(low).<\/p>\n

Update, 7:50pm EST<\/b> DBRS has announced that Weston is\u00a0“Under Review with Negative Implications”.<\/p>\n","protected":false},"excerpt":{"rendered":"

These issues are currently rated P-2(low) by Standard & Poors, which today placed them on Credit Watch Negative: At the same time, Standard & Poor’s placed its ratings, including its ‘BBB+’ long-term corporate credit rating, …<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[13],"tags":[],"class_list":["post-569","post","type-post","status-publish","format-standard","hentry","category-issue-comments"],"_links":{"self":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/569","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=569"}],"version-history":[{"count":0,"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/569\/revisions"}],"wp:attachment":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=569"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=569"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=569"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}