Moody's: Asia-Pacific (ex-Japan) corporates can refinance most debt maturing through 2018

Moody's Investors Service says that rated Asia Pacific (excluding Japan) non-financial companies should be able to refinance most of their $431 billion of domestic and cross-border bonds coming due through 2018, because the debt is mostly investment-grade and domestic.

"The rated investment-grade companies in Asia Pacific typically have access to a variety of funding sources, including domestic and international capital markets, and should have little trouble refinancing," says Joe Morrison, a Moody's Vice President and Senior Analyst.

Moody's report notes that the maturities also are spread fairly evenly. Debt maturities for the rated Asia Pacific corporates total $92 billion in 2015, $94 billion in 2016, peak at $120 billion in 2017, and fall to $96 billion in 2018. The total maturing through 2018 is up 14% from last year's $378 billion of four-year maturities.

Furthermore, the 10 largest debt issuers account for 45% of the bonds through 2018 and are all investment-grade. Nine of these issuers are government-related issuers from China or Korea with good access to funding.

"Most of the bonds -- 64% by value -- are domestic. As Asian companies tend to have better access to the domestic capital markets than to the cross-border markets, they should be able to refinance this debt," says Morrison.

Only 13% (by value) of the bonds issued by the rated companies maturing through 2018 are speculative grade, and Moody's says most of these companies can also address their maturing debt.

Speculative-grade companies issued $22 billion in foreign and domestic currency bonds during the first nine months of 2014, up from average annual issuance of $17 billion during the prior four years, which suggests investor demand for their bonds remains strong.

The amount of debt that speculative-grade companies have issued in currencies other than their own has risen. Absent event risk, the growing foreign currency high-yield bond markets have sufficient depth to absorb an average of $10 billion in refinancing needs over the next four years.

Moody's report further notes that China and Korea count for the majority of debt. Companies from these two countries issued about 84% of the $431 billion maturing through 2018, with Chinese companies accounting for 50%.

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