財經觀察 1794 --- Rating downgrade risk soars in Asia

http://www.ft.com/cms/s/0/70f41c7e-02cd-11de-b58b-000077b07658.html

The risk of credit rating downgrades for Asian companies is at a five-year high as the region’s export-led economies struggle with the effects of the worldwide slowdown, according to Standard & Poor’s.

The most vulnerable sectors included capital goods, forest products and building materials, carmakers, shops and restaurants, high technology and finance companies, S&P said in a report on Tuesday.

Three of the 11 Asia-Pacific companies that S&P has downgraded so far this year were in the financial sector in Japan and Australia. Five companies have lost their investment grade status in 2008 and are now classed as speculative, which means pension funds and other conservative investors can no longer buy their debt.

Ten further companies with investment grade ratings looked vulnerable to becoming “fallen angels” in 2009, S&P said.

Globally, downgrades have exceeded upgrades for seven consecutive months. The ratio of downgrades to all rating changes over the past 12 months was better in Asia at 74 per cent compared with more than 80 per cent in the US and Europe but the trend is worsening.

“Even though Asian companies came into this period with generally lower leverage than their western counterparts, disappointing earnings, weaker profitability and higher borrowing costs could propel the downgrade ratio higher in the coming months,” said Diane Vazza, head of the Standard & Poor’s global fixed income research group.

Nevertheless, few Asia-Pacific borrowers have failed to pay their debts so far. There have been only two defaults in the region by issuers rated by S&P. The rate of default on speculative-grade debt was 2.53 per cent in the 12 months to the end of January compared with 4.66 per cent in the US, 3.83 per cent globally and 1.97 per cent for emerging markets.

Financial issuers have raised $32.7bn so far this year and demand was strong for government-backed issues. Non-financial issues slowed in the first six weeks of the year although $12.7bn overall was recorded, S&P said.