Moody’s Investors Service’s Asian Liquidity Stress Indicator (Asian LSI) improved for the third consecutive month to 24.7% in January—its lowest level since July 2015—from 26.2% in December 2017. The Asian LSI measures the percentage of high-yield companies with Moody’s weakest speculative-grade liquidity score of SGL-4 as a proportion of high-yield corporate family ratings. It increases when speculative-grade liquidity deteriorates.
The number of rated high-yield companies with the weakest speculative-grade scores fell to 38 in January from 39 the month prior, while the total number of high-yield companies increased to 154 from 149 over the same timeframe, Moody’s said.
"The reading for January 2018 fell to the lowest level since July 2015, and is below its trailing 12-month average of 26.5%, benefitting from strong refinancing activity over the past 12 months" said Moody's Vice President and Senior Credit Officer Brian Grieser.
In January, 15 bond deals worth $4.8 billion closed, making up the largest monthly issuance of Moody’s-rated high-yield bond debt in Asia since June 2017, the ratings agency said. "But the Asian LSI remains slightly above the indicator's long-term average of 23.1%, showing that weak liquidity remains an issue for some companies in Asia," said Grieser.
– Nicholas Stern, managing editor