S&P sees tighter credit market for Asian companies

Corporate entities in the Philippines and the rest of Asia are facing a tougher fund-raising environment this year as the prolonged debt crisis in the euro zone makes foreign investors wary of investing in emerging market assets and pushes interest rates higher.

This was according to Moody’s Investors Service, which said in a report that the crisis in the West was likely to push some investors to the sidelines, thereby dampening demand for portfolio instruments even from Asian countries, which are projected to still post decent growth rates this year despite global uncertainties.

“Caution and uncertainty look to be the by-words for at least the early part of 2012,” said Laura Acres, vice president and senior credit officer at Moody’s.

The credit-rating firm said that should corporate entities be able to raise funds from the international bond market, this would not come without higher cost.

“In this more challenging environment, speculative-grade companies could face higher costs and weaker ones could have limited access to credit if investors decide it is too risky to lend to low-rated companies,” Acres said.

Earlier this month, nine countries from the euro zone, including France, had their credit ratings downgraded by Standard & Poor’s.