BRITISH AIRWAYS, Britain's largest airline, was left traumatised yesterday after the company had its...
BRITISH AIRWAYS, Britain's largest airline, was left traumatised yesterday after the company had its financial rating cut to "junk" status as S&P raised fears about BA's financial situation, writes the Scotsman.
Shares in the airline dropped 6% after S&P said it was worried about the prospects that BA bondholders would not be repaid if the airline would go bust.
This comes as BA - in its last accounts statement - announced debts of almost £7bn.
S&P cut BA's ratings to BB+ and BB-, from BBB- and BB+ respectively, rendering the bonds the status "junk".
According to S&P credit analyst Bob Ukiah, this decision was taken in order to protect bondholders as many factors have negatively affected BA financial health recently, including the decline in premium travel and SARS.
Meanwhile, BA's chief financial officer John Rishton said he was shocked by the drop in rating.
DESPITE YET another fat-cat row this week - this time against the WPP board - the Trade and Industry Select Committee said yesterday that the government should not change the law to fight big payoffs for at least two years, reports the Telegraph.
This comes as the Committee agreed with the NAPF and the ABI that this amount of time is needed to show how well boards responded to shareholder discontent.
As new regulations which opened up remuneration details to shareholders were only introduced this year, both the ABI and the NAPF believed that new laws were not necessary and would rather harm businesses' capability to attract the top candidates to their boards.
The Government, on the other hand, showed more interest in reacting to shareholder displeasure within those two years.
AS FAT-CATS continue to receive big pay checks, the economic outlook continues to look gloomy as expectations rose yesterday that the Bank of England may soon order another cut in interest rates after its new Governor Mervyn King announced a pessimistic view of the near future.
In an interview in the Times, King predicted that the consumer boom is over and that the economy's recovery will remain on the "slow" and that borrowing costs will fall already in the next coming weeks.
King also commented that a 3% rise in sterling "will have to be factored into our decisions", leaving analysts predicting that rates are likely to fall again by August.
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