Question

Think of a large industrial firm or retailer in your region(Canada) that has recently closed down (or is at risk of closing). What are some of the reasons for its closure? How are these related to the globally interconnected economy?

don't write about target and or Jet airways ..

Answer 1

In response to investors' growing interest in the coronavirus and its credit effects on companies, S&P Global Ratings is publishing a regularly updated list of rating actions it has taken globally on corporations and sovereigns. These are public ratings where we cite COVID-19, oil prices, or both as a factor. The latest edition is: "COVID-19: Coronavirus- And Oil Price-Related Public Rating Actions On Corporations, Sovereigns, And Project Finance To Date," published May 27.

Structured finance ratings are also affected due to the COVID-19 crisis, see "COVID-19 Activity In Global Structured Finance For The Week Ending May 22, 2020," published May 28. For specific consideration of CLOs, see "Sector Averages Of Reinvesting U.S. BSL CLO Assets: COVID-19-Related Corporate Downgrades Caused Significant Deterioration In First-Quarter 2020," published May 18, "U.S. CLO Exposure To Negative Corporate Rating Actions (As Of May 17, 2020)," published May 19, "A Breakdown Of U.S. CLO CreditWatch Negative Placements (As Of May 19, 2020)," published May 20, and "COVID-19: Coronavirus-Related Public Rating Actions On Nonfinancial Corporations And Affected European CLOs," published May 29.

Moreover, "COVID-19 Activity In U.S. Public Finance," published May 27, summarizes the sector's rating actions and publications to date. For international public finance, see "Overview Of International Public Finance Rating Actions Since March 10, 2020," published May 21.

Regarding sovereigns, see "An Overview Of Sovereign Rating Actions Related To COVID-19," published May 11.

"Credit FAQ: The Ratings Process And The COVID-19 Pandemic," published April 2, addresses some questions about the pandemic's effect on S&P Global Ratings and how our credit analysis and surveillance are proceeding during this time. "Q&A: Government Support, Forbearance, And Corporate Liquidity Analysis In A Time Of Stress," published April 9, provides a summary of certain elements of our criteria and rating definitions relevant to understanding how we may assess government support, forbearance, and corporate liquidity in a time of credit stress.

• This sector is expected to experience asymmetric setbacks from the coronavirus outbreak, as some industries are more dependent on exports than others. For example, the Fishing & Seafood Aquaculture industry is expected to experience a decline exports to China. According to the Conference Board of Canada, live and fresh lobster exports to China were valued at more than $450.0 million in 2019.

• Due to higher costs and a shortage of workers, farmers across Canada have begun to discuss the possibility of not planting a crop in 2020. Farmers, aided by the Canadian Federation of Agriculture (CFA), have requested financial assistance from the federal government to operate in this difficult landscape. The CFA has requested the establishment of an emergency fund in the amount of $2.6 billion.

• The Canadian logging industry has experienced about 40 temporary sawmill closures over the past few weeks, with operators citing a plunge in industry prices. Additionally, the closure of upstream pulp and wood chip manufacturers has forced some industry operators to suspend operations despite steady demand for products like toiler paper and paper towels. In response, the Forest Products Association of Canada has begun to advocate for a federal relief program directed at industry operators.

• Already one of the most highly regulated sectors in Canada, operators in this sector face increased scrutiny with regards to food production and distribution. To limit the spread of the coronavirus, regulators continue to increase sanitation requirements, in addition to minimizing transportation of sector products.

• Concerns about the potential transmission of the coronavirus among animals will require further monitoring. Previous outbreaks, such as the swine flu and bird flu, have shown the ability to spread among humans and animals. At this time, all reports indicate than transmission from animals to humans is not possible.

• The federal government of Canada recently announced a $1,500 payment for each temporary worker that farmers employ, highlighting the importance of these workers to this sector.

• In early May, the government announced a $252.0 million aid package for Canadian farmers. This package will be spread across the sector with the aim of alleviating some of the financial difficulties that operators have faced.