Wipeout looks more likely at 3 companies

[unhappycamper]

http://americasmarkets.usatoday.com/2014/08/13/wipeout-looks-more-likely-at-3-companies/



Wipeout looks more likely at 3 companies
Matt Krantz
August 13, 2014 8:00 am

Three publicly traded U.S. companies just got added to a list you don’t want your company to be on.

Surfwear maker Quiksilver (ZQK), oil and gas company Quicksilver Resources (KWK) and rare earth material producer Molycorp (MCP) have been added to Standard & Poor’s most recent “Weakest Links” list. These are the companies S&P says are the most at risk of defaulting. To make the list, these companies must have the lowest credit rating and have a negative outlook according to the debt analysts that follow the company.

Being named a Weakest Link by S&P isn’t something companies are proud of and can be somewhat onerous for both bond and stock investors. While defaults have been rare this year, these are definitely the companies to watch out for. There are now 144 companies globally considered to be weakest links. These three are just the latest publicly traded members added to the list.

And don’t think this is just a problem for bond investors. When companies default, common stockholders can find themselves suffering the most if bondholders are given equity in the companies. Investors are eyeing the massive amounts of debt that are coming due over the next few years, especially if interest rates rise as many expect.