Having warned - correctly - of the impending collapse of the US credit markets last year, it just seems ironic that Carl Icahn's firm has been downgraded to "watch negative" from stable by S&P, implying a cut to junk may be imminent. Just as we detailed earlier, activist investors have suffered greatly in the oil rout, and S&P cites declining investment values in the firm's portfolio, which have smashed the loan-to-value ratio up to 45% (a crucial threshold for the ratings agency). Full S&P Statement: Icahn Enterprises L.P. 'BBB-' Ratings Placed On CreditWatch Negative On Declining Portfolio Values And Higher Leverage
Icahn Enterprises L.P.'s investment portfolio has lost a significant amount of value in the last several months.
As a result, we are putting our 'BBB-' issuer credit rating and 'BBB-' issue rating on the firm's senior unsecured debt on CreditWatch with negative implications.
- The firm's loan-to-value ratio has very likely increased above 45%.
We expect to resolve the CreditWatch listing within 90 days once we obtain more performance data and observe investment values over a longer period.Standard & Poor's Ratings Services said today it placed its 'BBB-' issuer credit rating on Icahn Enterprises L.P. on CreditWatch with negative implications. We also placed our 'BBB-' issue rating on the company's senior unsecured debt on CreditWatch with negative implications.
"The CreditWatch action reflects declining investment values in the firm's portfolio that we believe have very likely led to the firm exceeding a 45% loan-to-value (LTV) ratio, which we previously cited as a key threshold for the rating,"......MORE