ASIA PACIFIC WEEKLY

ASIA PACIFIC WEEKLY

Sep 16 - 23, 2015

In this week’s Asia Pacific Weekly, we examine the effects of China’s GDP slowdown on our rated non-Chinese, non-financial corporates in Asia Pacific. Our research shows that most of these rated entities can withstand the impact from the slowdown, supported by their businesses outside of China and existing financial cushions.

And we take a closer look at two reforms recently implemented by the Chinese government. First, a reform plan for state-owned enterprises (SOEs) reinforces government control over strategically important state-owned assets and will broadly support the credit quality of our rated SOEs. Second, regulatory reforms in China’s water sector will drive infrastructure investment and industry consolidation.

And the financial metrics of our rated Chinese property developers in 1H 2015 were largely stable — and in line with our expectations — when compared with the developers' financial metrics at year-end 2014.

Finally, we turn to Australia, where our latest Residential Mortgage Delinquency Map shows that delinquencies for residential mortgages decreased in New South Wales from May 2014 to May 2015, but increased for most other Australian states and territories over the same period.

In terms of events, we have added a number of new teleconferences since our last issue. Please refer to our full list below.

Best regards,

Min Ye
Managing Director – Regional Head Asia Pacific

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Moody's Training Seminars

RESEARCH

APAC Non-Financial, Non-Chinese Corporates: Most Rated Companies Can Withstand Impact from China's GDP Slowdown
[23 Sep] The report groups sectors in the region into three categories based on the proportion of rated companies with revenue exposure to China. The report excludes companies based in China and those that conduct nearly all of their operations in China.

Renminbi Bonds Monitor
[22 Sep] This latest quarterly report that provides an update on China's onshore and offshore RMB bond markets, and Moody's views on market trends.

Non-Property Companies — China: Revenue Growth Will Remain Constrained
Through 2016
[22 Sep] The financial results of Chinese non-property companies for the first half of the fiscal year ended 31 December 2015, suggest that revenue growth will remain under pressure through 2016, and leverage will stay elevated for many of the companies over the same period.

Global Automotive Manufacturers: Auto Sales to Rebound Modestly in 2016 After China Growth Slowdown
[21 Sep] Global auto sales will improve in 2016, with steady growth in the US and strong sales in Western Europe mitigating sharply lower sales in Japan and slowing growth in China

Increasing competition will extend consolidation of Australian mutuals
[21 Sep] Slowing economic growth and increasing competition will pressure the growth and
profitability of Australia's mutual financial institutions over the next 12-18 months, and will continue to drive industry consolidation.

Industry Outlook - Chinese Life Insurance: Stable Outlook, but Negative Headwinds Prevalent
[21 Sep] The stable outlook for the sector takes into account the likely scenario that the equity market will remain highly volatile for a significant part of the next 12-18 months, on the back of lingering economic uncertainty, low liquidity and reduced margin financing activity.

Chinese Property & Casualty Insurance: Stable Outlook; But Increasing Challenges from Motor Pricing Liberalization
[21 Sep] The stable outlook on China's property & casualty sector reflects its view that insurers will remain adequately capitalized to support business growth and meet regulatory requirements in the coming 12-18 months.

China mall vacancies, reconfiguration uncertainties negative for CMBS
[17 Sep] Various pressures on the values of malls in China are credit negative for Chinese CMBS as the situation will make it more difficult for obligors to refinance their loans at maturity. Nevertheless, the negative impact will likely be moderate, because consumption levels in China demonstrate large room for growth and the government's urbanization.

Residential Mortgage Delinquency Map: NSW Improves, but Most States Deteriorate
[17 Sep] The report examines mortgage delinquency trends based on states, regions, and postcodes. The improvement in Australia-wide delinquencies was largely driven by a significant decline - 0.29 percentage points - in delinquencies in NSW, reflecting the state's relatively strong economic activity and rapidly rising property prices in Sydney.

China: Reform Plan Will Support Credit Quality of Rated SOEs
[16 Sep] China's latest reform plan for state-owned enterprises (SOEs) reinforces government control over strategically important state-owned assets and will broadly support the credit quality of its rated SOEs.

China Water Sector: Regulatory Reform Will Drive Infrastructure Investment and
Industry Consolidation
[16 Sep] To achieve policy goals, outdated production capacity will be phased out and new pollution control equipment will be introduced into water-related industries. As for the tariff increases and reforms in the industry, these changes will attract private companies to invest in the sector.

Moody’s Credit Outlook on 17 Sep and 21 Sep

[17 Sep] Fosun’s Proposed Equity Placement Is Credit Positive; AngloGold Ashanti’s Bond Buyback Will Improve Cash Flow, a Credit Positive; and more

[21 Sep] India’s Safeguard Duty on Steel Imports Is Credit Positive for Steel Producers; Pakistan’s Latest Interest-Rate Cut Will Squeeze Banks’ Profitability; Korea’s Pace of Public Sector Debt Consolidation Accelerates, a Credit Positive; and more

RATING EVENTS

AUSTRALIA
[18 Sep] Moody's assigns Aaa (sf) to Australian RMBS issued by Citigroup
[21 Sep] Moody's affirms Ascendas REIT's A3 ratings on acquisition announcement; outlook stable
[22 Sep] Moody's rates BHP Billiton's new hybrid notes A3

CHINA
[17 Sep] Moody's upgrades China Merchants Bank-supported bonds of Double Charm Limited
[17 Sep] Moody's assigns A1 to CCB-supported bonds of CSCI Finance (2015) Co. Lt
[18 Sep] Moody's assigns definitive Baa3 to China Metallurgical Group's SGD bonds
[18 Sep] Moody's assigns definitive Baa1 to Shanghai Construction Group's USD notes

JAPAN
[16 Sep] Moody's upgrades Morgan Stanley MUFG Securities Co., Ltd.'s Backed Commercial Paper rating to P-1 from P-2 concluding the review
[17 Sep] Moody's affirms Shinkin Central Bank's A1 ratings; outlook stable
[17 Sep] Moody's affirms Shizuoka Bank's A1 ratings; outlook stable
[17 Sep] Moody's assigns definitive ratings to Asahi Kasei Hebel Haus® New Master Trust RMBS Series12 Senior Beneficial Interests
[17 Sep] Moody's affirms Chugoku Bank's A1 ratings; outlook stable
[18 Sep] Moody's assigns provisional rating to Bora 2 backed by residential mortgages insured by JHF
[18 Sep] Moody's downgrades Atami Beach Line 3 backed by a toll road in Japan

KOREA
[18 Sep] Moody's assigns (P)B3 ratings to TDBM's GMTN program
[22 Sep] Moody's assigns Aa3 rating to KNOC's MTN drawdown

MALAYSIA
[21 Sep] Moody's assigns A3 to Cagamas Global Sukuk's SGD senior unsecured sukuk

PAKISTAN
[18 Sep] Moody's assigns (P)B3 rating to Pakistan's global bond offering

VIETNAM
[18 Sep] Moody's affirms ratings of Vietnam International Bank, changes outlook to positive
[18 Sep] Moody's affirms VP Bank's deposit ratings at B3, changes outlook to stable

ANNOUNCEMENTS

AUSTRALIA
[16 Sep] Moody's: No rating impact on BOQ's Series 2008-1 REDS Trust after collateral substitution
[18 Sep] Moody's: No rating impact on Heritage Bank's HBS Trust 2008-1R after collateral substitution

CHINA
[17 Sep] Moody's: China mall vacancies, reconfiguration uncertainties negative for CMBS
[18 Sep] Moody's: CAR's ratings unaffected by investment in UCAR and Hertz stake reduction
[22 Sep] Moody's: China Metallurgical Group's improved 1H 2015 results in line with its ratings

MOODY'S EVENTS

Briefing: Japan's Real Estate Market - Preparing – in Stable Demand/Supply Conditions – for Future Uncertainty
Tokyo, 18 Sep

Briefing: Chinese Insurance Industry
Beijing, 21 Sep

Briefing: Chinese Insurance Industry
Shanghai, 23 Sep

Briefing: Asian High Yield Corporates Trends & Risks: Indonesia in Focus
Asia Pacific, 23 Sep

China’s Non-Property Companies: Most Will See Revenue and Leverage Pressure Through 2016
Asia Pacific, 24 Sep

China Water Sector: Favorable Regulatory Developments Underpin Credit Drivers
Asia Pacific, 25 Sep

Teleconference: Asian Emerging Market Sovereigns: Credit Resilience Due to Buffers Against Rising Risks
Asia Pacific, 29 Sep

Teleconference - Australian Mortgage Delinquencies: What Are the Main Drivers? Low Interest Rates, Two-Speed Housing Market and Falling Commodity Prices
Asia Pacific, 29 Sep

Briefing: Japanese Electric Utility Industry - Credit Impact of Reform of Electric Utility Sector
Tokyo, 02 Oct

Briefing: Outlook for Japanese Automakers
Tokyo, 06 Oct

MOODY'S TRAINING SEMINARS

HONG KONG
Corporate Credit Rating Analysis, 2-4 Nov
Fundamentals of Bank Credit Risk Analysis, 5-6 Nov
Insurance Credit Analysis, 25-27 Nov

KUALA LUMPUR
Islamic Finance – Risk Management, 23-24 Nov
Islamic Finance – Sukuk: Theory and Practice, 25-26 Nov

SINGAPORE
Covenants & Documentation, 11 Nov
Corporate Credit Rating Analysis, 17-19 Nov
Fundamentals of Corporate Credit, 8-11 Dec

SYDNEY
Advanced Corporate Credit Analysis, 13-15 Oct
Covenants & Documentation, 16 Oct
Corporate Credit Rating Analysis, 19-21 Oct
Fundamentals of Bank Credit Risk Analysis, 22-23 Oct

TOKYO
Fundamentals of Bank Credit Risk Analysis, 3-4 Dec

Soo-Jung Kim
Representative Director
Korea and Mongolia
+82.2.787.2273

Vineet Gupta
Vice President
India
+91.750.625.0104

Asia Pacific Client Desk
Research & Subscriptions
+852.3551.3077

Yasushi Furuya
VP-Account Management
Japan
+81.3.5408.4272

James Flitton
Vice President
Singapore
+65.6398.8338

Maria Lee
Vice President
South China - Hong Kong
+852.3758.1338

Kelly Moy
Senior Vice President
North Asia
+852.3758.1323

Cynthia Zhao
Vice President
North China - Beijing
+86.10.6319.6566

Miki Zhou
Vice President
Central China - Shanghai
+86.21.6101.0227

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