Moody's Bottom Rung list includes AMD, Clearwire, Palm, Unisys; Media default Armageddon
Moody's has released its "Bottom Rung" list of companies that have a high risk of default and weak liquidity and there are a few technology and telecom household names on the list including AMD, Clearwire, Palm and Unisys. Media companies are the biggest chunk of companies on the verge of credit defaults.
The list, which got some play in the Wall Street Journal Tuesday, covers 283 speculative grade companies. Last year, Moody's Bottom Rung list had 157 companies.
Moody's, under fire for failing to warn folks about the impending mortgage meltdown, is looking to get ahead of the latest likely round of corporate bond defaults. The problem is that Moody's could cause more problems for companies that appear on the list.
Moody's says in its report:
The current Bottom Rung list provides ample evidence of a severe default cycle. More than 23% of all U.S. speculative-grade companies are on the list, compared with 9% two years ago, Companies on the list today have not defaulted. They carry either a Probability of Default Rating of Caa1 or lower, a B3 with a negative rating outlook, or a B3 with a rating under review for downgrade. Industries with broad exposure to weak consumer spending, such as media, autos, retail and gaming, are highly represented in the Bottom Rung.
Here's a look at the industry breakdown in the Moody's Bottom Rung report with a few quick notes:
In any case, here's a look at the tech, telecom and media companies on the Moody's list that fit in our coverage area. This list is close to exhaustive but I may have missed a few here and there scanning the PDF.
- Advanced Micro Devices (just improved its financial picture)
- Advanstar Communications
- AGS LLC
- Allbritton Communications
- American Media Operations
- Barrington Broadcasting Group
- Blockbuster
- Cambrium Learning
- Canon Communications
- Charter Communications
- Citadel Broadcasting
- Clearwire (Wimax buildout vs. cash burn; Also new CEO)
- Conexant Systems
- Cumulus Media
- Eastman Kodak
- Emmis Communications
- Freedom Communications
- Freescale
- Global Crossing
- Gray Television
- Instant Web
- Intcomex
- Integra Telecom
- Intelsat
- Jobson Medical Information
- Level 3
- Local TV Finance
- Lodgenet Interactive
- Millennium New Jersey Holdco
- Morris Publishing Group
- Newport Television Holdings
- Nexstar Finance Holdings
- NextMedia Operating
- NV Broadcasting
- Open Solutions
- Orbitz Worldwide
- Palm (raised some cash ahead of Pre launch)
- Penton Business Media
- Quantum Corp.
- Radio One
- Reader's Digest
- Regent Broadcasting
- Securus Technologies
- Sirius XM
- Source Interlink
- Spanish Broadcasting System
- Telcordia Technologies
- Unisys
- Univision Communications
- X-Rite Inc.