Overview
When assessing the impact of the current economic environment on a corporate’s
financial profile, the refinance risk of debt continues to be an important component
of potential default risk. Uncertainties continue to grow regarding banks’
willingness and/or capacity to provide or renew existing funding lines. Capital
markets, while exhibiting sporadic activity for corporate issuers, remain subdued
relative to the level of accessibility seen in recent years.
In August 2008, Fitch Ratings published its annual Corporate Liquidity Study
covering Asia‐Pacific and European corporates rated ‘BBB’ and below. This study
updates the debt maturity profiles for around 145 rated Asia‐Pacific corporates
across the rating spectrum. The maturity profiles are analysed on a quarterly basis
to December 2010 and by different maturity buckets thereafter. It also outlines
Fitch’s assessment of the ability of corporate issuers to access, maintain and
generate liquidity — encompassing Fitch’s expectations for internally generated
cash flow, period‐end cash holdings, and long‐term committed facilities from banks.
In addition, Fitch’s analysts have provided a qualitative review of the health of the
bond and bank markets in the region.
Credit ratings continue to reflect the foreseeable refinance risk of corporates,
including an assessment of the ability of companies’ treasury teams to manage such
funding issues.