Moody’s says Asia Pacific corporate 3Q credit trend negative
Global rating agency Moody’s says that the rating trend for corporates in Asia Pacific remained negative in 3Q2012 as negative rating actions continued to outnumber positive actions by a large margin of 15 to 5.
However, this downward credit trend is expected to stabilize for the rest of the year, in view of the easing in monetary measures implemented by governments in the region and signs of a stabilizing economy in China, says Clara Lau, a Moody’s Group Credit Officer. In this context, Moody’s macroeconomic central scenario for GDP growth in China is in the range of 7 to 8% in 2012 and 2013. Access by companies to liquidity , especially for speculative grade companies , is therefore expected to improve, while operating performances will also demonstrate steadiness.
Lau was speaking on the release of Moody’s latest report, which she authored, on rating trends in Asia Pacific. The report is entitled “3Q2012 Rating Trends For Asia Pacific Corporates Remained Negative, but Expect to Stabilize.” The report covers Asia, Australia and Japan. Similar to the previous quarter, 73% of the negative actions affected speculative grade companies, mainly resources and property issuers. Geographically, Chinese rated issuers continued to drive the negative rating trend, accounting for 40% of total actions, followed by Indonesian and Korean issuers, both at 20%.