Asia-Pacific corporations have higher ratings, fewer defaults, Moody's says

New York, Aug. 26 - Corporate debt issuers in the Asia-Pacific region have higher average credit ratings and are on average less likely to default than those in other regions, Moody's Investors Service said Thursday.

The average annual default rate for Asia-Pacific corporate bond issuers is 0.8% compared to 1.9% globally, the rating agency said.

Indicating the higher average rating, only 7% of Asia-Pacific issuers are rated single B while 20% of the world total are assessed at that level.

"Many of the weaker issuers were not rated by Moody's," said Moody's analyst Praveen Varma, in a news release. Varma wrote a new report examining credit trends in the region.

"While almost all major defaults are discussed in the study, only 38 out of the 181 Asia-Pacific defaulters since 1990 identified by Moody's were rated by Moody's."

Most of the region's defaults occurred during or shortly after the 1997-1998 financial crisis.

Indonesia had the largest number at 56 defaults, while Korea had the most by value at $16.3 billion.

Moody's noted that Japan has had a "disproportionately low" number of defaults - just one company rated by Moody's has defaulted since 1990.

"Japan's default rate is strikingly low compared to other regions because speculative-grade issuers have limited access to bond markets and government- and bank-sponsored bailouts have often enabled insolvent companies to avoid defaults on their bonds," Varma said.

As of 2003, Moody's rated 525 issuers in the Asia-Pacific region, up from less than 120 in 1990.

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