Almost a quarter of emerging market companies’ credit quality would be at risk if the Russia-Ukraine conflict escalated, with consumer sectors most exposed and commodity producers set to benefit.

Four Moody's-rated corporate debt issuers globally defaulted in April, down from eight in March, and the trailing 12-month global speculative-grade default rate edged down to 1.9% from 2.1%. Our Credit Transition Model projects a modest rise in the default rate over the next year but risks are increasing as a result of inflationary pressures and the pace of monetary tightening.

Liquidity risk in late 2021 was low for companies in Brazil, Chile and Mexico, but in Argentina and Peru, about half of all companies would be unable to cover 150% of spending needs over the next 12 months. See our summary report, as well as individual reports on each of these countries.

Elevated steel prices and steady demand amid the Russia-Ukraine conflict are supporting revenue for Asia-Pacific steelmakers, but higher input costs will reduce margins and earnings.