What are the key near-term credit issues for CFC?
The stable outlook assumes no further deterioration in the loan portfolio. The default of another large borrower could lead Standard & Poor’s Ratings Services to revise the outlook to negative. In addition, Standard & Poor’s expects CFC to reduce leverage and lower its debt-to-equity ratio below 6x by year-end 2005. Failure to do so would likely result in a negative outlook. Lastly, Standard & Poor’s expects CFC to continue to reduce its exposure to telecom loans over time.
