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Most Indonesian firms pass Moody’s liquidity stress
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Pedestrians stand in front of the Arch of the Revolution monument in Mexico City on Dec.26, 2012. Moody's credit rating agency has changed the outlook for Mexico's debt rating from stable to negative, citing low oil prices and slow economic growth, according to a Moody's statement on March 31. Meanwhile, Moody's liquidity stress has shown that most Chinese companies, especially those related to the oil and gas business, have had their ratings downgraded. (Associated Press/Alexandre Meneghini)
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sian liquidity stress measured by Moody's Investors Service has shown a worsening trend as most Chinese companies, especially oil and gas companies, have had their ratings downgraded. However, the ratings of most Indonesian companies under Moody's review are steady.
Indonesian companies assessed by Moody's included Alam Sutra Realty, Gajah Tunggal and Tower Bersama Infrastructure. The rating agency has maintained their ratings and liquidity status.
"The Asian liquidity stress index is at elevated levels because of the weakening trends in corporate liquidity across Asia," Moody's vice president Brian Greiser said in a press statement in Jakarta on Thursday.
In China, companies operating in the mining, oil and gas sectors experienced disrupted cash flows while real estate and property companies faced hard sales. Stricter refinancing requirements led to the downgrade of the companies’ ratings.
Indonesian oil and gas company Energi Mega Persada was among Asian companies whose rating outlook is likely to be downgraded by Moody's in 2016.
On March 18, Energi Mega was under review for a rating downgrade due to its reliance on short-term funding despite stable gas production and a solid long-term market. The company also depends on a concentrated group of oil and gas producing blocks.
In general, liquidity in Asia was weaker compared to other regions as the debt capital markets lacked maturity, causing Asian companies to rely on local banks for uncommitted funding.
The bank loans in Asia were rather short termed and less committed, according to Moody’s. (ags)
