As the U.S. capital goods sector contends with the economic downturn and the credit crisis, we expect that many issuers rated by Standard&Poor's Ratings Services will soon be confronting additional significant issues brought on by the market turmoil and broad stock market decline: higher pension costs, larger underfunded balances, and higher cash contribution levels that will place added pressure on their liquidity and other credit metrics. Indeed, even as issuers in many sectors are shedding thousands of jobs to cut compensation costs, we expect their rising costs for pension plans--which we view as forms of deferred compensation--may to some extent undercut those efforts, because of poor asset performance. Recently, many issuers within the capital goods sector, including Cooper

Report Type: Commentary
Sector: Aerospace & Defense, Asset-Backed Securities, Automotive, Building Materials, Capital Goods, Collateralized Debt Obligations, Commercial MBS, Consumer Products, Corporations, Financial Institutions, Global Issuers, Health Care, High Technology, Media & Entertainment, Public Finance, Residential MBS, Structured Finance, Utilities
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 S&P Credit Research
S&P Credit Research provides analysis on issuers and debt obligations of corporations, states and municipalities, financial institutions, insurance companies and sovereign governments. S&P also offers insight into the credit risk of structured finance deals, providing an independent view of credit risk associated with a growing array of debt-securitized instruments.