High downgrade biases for banking, property, resources, says S&P

HONG KONG - The risk of downgrades in Asia-Pacific has eased in the near term as China settles to a lower economic growth trajectory, Standard & Poor's says in a report published today, but while forecasting that the overall growth rate in Asia-Pacific's corporate credit will stabilise, S&P says some sectors, including financial institutions, real estate, and natural resources, have high negative rating biases.

“These sectors have reaped the benefits of the recent 'boom' times and accumulated debts rapidly." S&P credit analyst Terry Chan says.

“We consider it likely that more defaults will occur in the region, which is a lag effect from the rapid credit build-up in the past few years. But the size of defaults is likely to be limited, and not present a serious systemic threat to the region.” www.standardandpoors.com (ATI).