Bangkok--9 Aug--Standard & Poor's
On Aug. 5, 2011, we lowered our long-term sovereign rating on the United States of America to 'AA+' from 'AAA'.
The ratings outlook on the U.S. is negative.
Based on our criteria for government-related entities (GREs), this downgrade of the U.S. results in a downgrade of Navy Exchange Service Command (NEXCOM).
Accordingly, we are lowering our corporate credit rating on NEXCOM to 'AA-' from 'AA', but affirming our 'A-1+' short-term rating on the organization and removing all the ratings from CreditWatch, where they were placed with negative implications on July 15, 2011.
The negative outlook reflects our opinion that, based on our GRE criteria, a future downgrade of the U.S. to 'AA' or 'AA-' would result in another downgrade of NEXCOM.
Standard & Poor's Ratings Services said today that it lowered its corporate credit rating on Navy Exchange Service Command (NEXCOM) to 'AA-' from 'AA'. At the same time we affirmed our 'A-1+' short-term rating on this government-related entity (GRE). In addition, we removed all the ratings from CreditWatch, where they were placed with negative implications on July 15, 2011. The outlook is negative.
"The downgrade reflects the GRE link with the United States of America, for which our long-term sovereign rating is now 'AA+', with a negative outlook," Said Standard & Poor's credit analyst Helena Song.
The 'AA-' rating on NEXCOM reflects Standard & Poor's opinion that there is a very high likelihood the U.S. government would provide timely and sufficient extraordinary support to NEXCOM in the event of financial distress. We assess the stand-alone credit profile (SACP) of NEXCOM as 'a-'.
In accordance with our criteria for GREs, our view of a very high likelihood of extraordinary government support is based on our assessment of:
NEXCOM's very important role as a provider of service to military personnel around the world, including meeting key political (military-related) objectives of the government and in the implementation of key national policies; andThe very strong link between NEXCOM and the U.S. government.
Our outlook on NEXCOM is negative. Based on our GRE criteria, a future downgrade of the U.S. to 'AA' or 'AA-' would result in another downgrade of NEXCOM. Our 'a-' stand-alone credit profile on NEXCOM should also remain unchanged.
RELATED CRITERIA AND RESEARCH
2008 Corporate Criteria: Analytical Methodology, April 15, 2008
General Criteria: Rating Government-Related Entities: Methodology And Assumptions, Dec. 9, 2010
Complete ratings information is available to subscribers of RatingsDirect on the Global Credit Portal at www.globalcreditportal.com. All ratings affected by this rating action can be found on Standard & Poor's public Web site at www.standardandpoors.com. Use the Ratings search box located in the left column.
Media Contact:
Mimi Barker, New York (1) 212.438.5054,
[email protected]
Analyst Contacts:
Helena Song, CFA, New York (1) 212-438-2477
Mariola Borysiak, New York (1) 212-438-7839