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20th Edition, July 2020
CONTACTSCathy Lu +65.6398.8313Associate [email protected]
Nidhi Dhruv, CFA +65.6398.8315VP-Senior [email protected]
Ian Lewis +65.6311.2676Associate Managing [email protected]
Terry Fanous +65.6398.8307MD-Public Proj & Infstr [email protected]
Marie Diron +65.6398.8310MD-Sovereign [email protected]
Gene Fang +65.6398.8311Associate Managing [email protected]
Graeme Knowd [email protected]
Jerome Cheng +852.3758.1309Associate Managing [email protected]
Hector Lim [email protected]
FEATURE ARTICLESASEAN
Coronavirus – ASEAN-5: Policy response provides somesupport but unlikely to offset rising credit risk
2
Nonfinancial companies – Asia Pacific: Heat map update: Morecompanies have high exposure to coronavirus disruptions
3
Indonesia
Cross-Sector – Indonesia: Weaker-than-expected governmentsupport reduces credit quality for some SOEs
5
Finance companies – Indonesia and Vietnam: Asset qualitydeterioration amid coronavirus outbreak will strain liquidity
6
Indonesia Asahan Aluminium (Persero) (P.T.): Elevatedleverage, weaker performance of subsidiaries and volatilecommodity prices constrain Inalum's credit quality
7
Cambodia
Government of Cambodia – B2 stable: Annual credit analysis 9
Philippines
Government of the Philippines – Baa2 stable: Update followingrating affirmation, outlook unchanged
10
Singapore
DBS, OCBC and UOB: Q1 2020 update: Results point tofurther weakening of asset quality and profitability
12
REITs – Singapore: Easing of regulatory rules will support cashflow and liquidity, a credit positive
13
ASEAN Snapshot & Dashboards 15
MOODYS.COM
FEATURE ARTICLES ASEAN
Coronavirus – ASEAN-5: Policy response provides some support butunlikely to offset rising credit riskOriginally published on 25 June 2020
SummaryThe ASEAN-5 economies – Malaysia (A3 stable), the Philippines (Baa2 stable), Indonesia (Baa2 stable), Vietnam (Ba3 negative) andThailand (Baa1 stable) – have taken steps to mitigate the economic damage of the coronavirus outbreak. The support packages vary inscale and scope, and are largely contingent in nature. While they will broadly help reduce some of the negative effects of the crisis, theywill not offset the rising recessionary or credit risks for most sectors.
» Policy measures will provide a degree of support, but the confluence of shocks will weigh on growth prospects. Thegrowth slowdown in the region will be significant relative to previous crisis episodes, but will still be moderate compared to otherregions. Nonetheless, the ASEAN-5 are negatively impacted by sharp falls in external trade flows, sluggish commodity prices thatweigh on the fiscal revenues of commodity exporters, and financial market volatility that can trigger capital outflows .
» Policy measures will have significant fiscal costs. Government revenue across the region will decline and spending will riseas countries try to mitigate the effects of the crisis. Fiscal costs of support measures will be significant, with debt burdens onlystabilising from 2021 for most economies. However, the ASEAN-5 countries had adequate fiscal buffers before the pandemic thatgives them fiscal space to respond to the crisis.
» Credit risks for banks have increased, despite policy support. Policy measures have mostly focused on providing liquidityto banks to support new lending, and through credit restructuring such as debt moratoriums. As moratoriums are lifted, banks'problem loans will likely increase.
» Few corporate sectors will benefit directly from government support. Strategically important state-owned enterpriseswill likely take priority in receiving direct financial support. Privately owned companies will get some support from broader policymeasures such as temporary tax relief and lower interest rates.
» Infrastructure sector will get limited policy support but essentiality of services may help shore up demand forsome companies. With the exception of Indonesia, few countries in the region have taken steps to support utilities and otherinfrastructure companies. Governments have instead shifted some of the burden related to policy support to the utilities and otherinfrastructure providers.
Deborah Tan, AVP-Analyst/CSRMoody’s Investors [email protected]+65.6398.8335
Anushka Shah, VP-Senior AnalystMoody’s Investors [email protected]+65.6398.3710
Eugene Tarzimanov, VP-Sr Credit OfficerMoody’s Investors [email protected]+65.6398.8329
Maisam Hasnain, CFA, AVP-AnalystMoody’s Investors [email protected]+65.6398.8325
This publication does not announce a credit rating action. For any credit ratings referenced in this publication, please see the ratings tab on the issuer/entity page onwww.moodys.com for the most updated credit rating action information and rating history.
2 20 July 2020 Inside ASEAN: 20th Edition, July 2020
FEATURE ARTICLES ASEAN
Nonfinancial companies – Asia Pacific: Heat map update: Morecompanies have high exposure to coronavirus disruptionsOriginally published on 25 May 2020
» Number of companies with high and moderate exposure has increased. About 22% of the 476 Asia Pacific nonfinancialcompanies we rate have high exposure to disruptions from the coronavirus, up from 20% in late March. About 39% have moderateexposure, up from 36%. These numbers have increased as the effects of disruptions on companies' credit quality have become moreapparent. The remaining 39% of rated companies have low exposure, down from 44% in late March.
» Exposure is high for 22% of companies. These companies are sensitive to consumer demand and travel restrictions, such asairlines, automakers, auto part suppliers, casinos, discretionary retail and hospitality companies. The crude oil price decline hurts oiland gas companies, and weak industrial activity hurts steel-makers and manufacturers. Of the 105 high exposure companies, nearly90% have negative outlooks or are under review for downgrade. And nearly 30% have weak liquidity.
» Exposure is moderate for 39% of companies. Most of these companies operate in the mining, property, refining and marketing,chemical, protein and agriculture sectors. Just 4% (eight companies) of the 183 companies with moderate exposure have weakliquidity.
» Exposure is also low for 39% of companies. These companies provide essential goods and services or have diversified businessmodels. They include information technology, telecommunications and media, and engineering and construction companies.Online retail companies also benefit from consumers staying home. Just one of the 188 low exposure companies has weak liquidity.
Exhibit 1
Asia Pacific sector exposure to coronavirus disruptions
Source: Moody's Investors Service
3 20 July 2020 Inside ASEAN: 20th Edition, July 2020
Kaustubh Chaubal, VP-Sr Credit OfficerMoody’s Investors [email protected]+65.6398.8332
Laura Acres, MD-Regional Corporate FinanceMoody’s Investors [email protected]+65.6398.8335
Gary Lau, MD-Corporate FinanceMoody’s Investors [email protected]+852.3758.1377
Ian Lewis, Associate Managing DirectorMoody’s Investors [email protected]+65.6311.2676
4 20 July 2020 Inside ASEAN: 20th Edition, July 2020
FEATURE ARTICLES INDONESIA
Cross-Sector – Indonesia: Weaker-than-expected government supportreduces credit quality for some SOEsOriginally published on 26 June 2020
» Government support is more selective than we initially expected. The Indonesian government's (Baa2 stable) support forstate-owned enterprises (SOEs) will be more differentiated in form and timeliness, as the government directs more resourcesto navigating the economy through the coronavirus outbreak. We expect government support to be primarily through debtrestructuring or refinancing with state-owned banks, instead of equity injections. To reflect this, we reduced the uplift in two SOEratings.
» Rated SOEs are more highly leveraged after doubling outstanding debt in the last four years. Significant debt-fundedgrowth in previous years was not matched with equally strong earnings growth. Additionally, coronavirus disruptions are drasticallyreducing earnings and debt-service ability. In the absence of direct government support, most SOEs will rely on the refinancing, or insome cases, reprofiling of debt.
» Government's strained fiscal position limits its ability to provide support. Coronavirus-prompted economic turmoil willcause a sharp slowdown in GDP growth. Slower growth, coupled with a wider fiscal deficit from stimulus spending, and currencydepreciation will contribute to an increase in pressures in debt affordability.
» Wholly government-owned companies or those with government-guaranteed debt will continue to benefit from veryhigh support.Perusahaan Listrik Negara (P.T.) (Baa2 stable) and Pertamina (Persero) (P.T.) (Baa2 stable) are fully government ownedand operate in strategically important sectors with dominant market shares. The government guarantees 78% of Hutama Karya(Persero) (P.T.)'s (Baa3 stable) debt.
» Wholly government-owned companies in important sectors benefit from high support.Indonesia Asahan Aluminium(Persero) (P.T.) (Inalum, Baa2 negative), Pelabuhan Indonesia II (Persero) (P.T.) (Pelindo II, Baa3 stable) and Pelabuhan Indonesia III(Persero) (P.T.) (Pelindo III, Baa3 stable) operate in less essential sectors than public utilities. We maintained Inalum's rating and itsthree-notch uplift. We equalized the uplift to one notch for both Pelindos, leading to Pelindo II's downgrade by one notch to Baa3stable.
» Some corporate SOEs are less likely to receive direct government support. Partially owned SOEs that operate in competitivesectors are less likely to benefit from support. We reduced Jasa Marga (Persero) Tbk (PT)’s uplift by one notch and downgraded itsratings by one notch to Baa3 with a negative outlook. Wijaya Karya (Persero) Tbk's weakened underlying credit profile, however,drove its one-notch downgrade to Ba3 with a negative outlook.
» State-owned banks can accommodate restructuring and refinancing of SOE bank debt. We expect state-owned banks,which are well capitalized and have ample liquidity, to support SOE debt restructuring and refinancing. About 71% of rated SOEs'debt maturing over 2020-21 is bank debt, with a substantial portion of this from the state-owned banks.
Nidhi Dhruv, CFA, VP-Senior AnalystMoody’s Investors [email protected]+65.6398.8315
Abhishek Tyagi, VP-Senior AnalystMoody’s Investors [email protected]+65.6398.8309
Spencer Ng, VP-Senior AnalystMoody’s Investors [email protected]+65.6311.2625
Ray Tay, Senior Vice PresidentMoody’s Investors [email protected]+65.6398.8306
5 20 July 2020 Inside ASEAN: 20th Edition, July 2020
FEATURE ARTICLES INDONESIA
Finance companies – Indonesia and Vietnam: Asset qualitydeterioration amid coronavirus outbreak will strain liquidityOriginally published on 29 May 2020
SummaryMeasures to stop the spread of the coronavirus will weaken economic activity, and cause higher unemployment in Indonesia and Vietnam.As a result, borrowers' debt service capacity will deteriorate, leading to increases in non performing loans at finance companies in the twocountries. Declines in loan repayments by customers in turn will lead to a deterioration of cash flow at the lenders, creating liquidity stress.
» Economic disruptions will result in asset quality deterioration. The majority of customers of finance companies in Indonesiaand Vietnam are retail consumers, many of whom work in informal sectors that account for a large share of both countries'economies, or nonsalaried workers with unstable income sources, such as shop owners and freelancers. Many of these borrowerswill lose jobs or experience drops in income as lockdowns and social distancing measures to contain the spread of the coronavirusdampen economic activity. This will lead to increases in defaults on loans from finance companies.
» Asset quality deterioration will lead to liquidity stress. Cash flow at finance companies in the two countries will deterioratesignificantly as loan repayments by customers drop. This will create liquidity stress for the lenders because they have very thinliquidity buffers.
» Support from parent groups will help underpin credit profiles. Finance companies affiliated with banks or large conglomeratesare likely to receive liquidity or capital injections from their parent groups, and this will provide some support for their creditprofiles. Given that finance companies' standalone credit profiles will deteriorate, direct or indirect parental support will be a criticalfactor underpinning their overall credit profiles.
Jeffrey Lee, AVP-AnalystMoody’s Investors [email protected]+65.6311.2649
Alex Hang, Associate AnalystMoody’s Investors [email protected]+65.6398.3714
Lingxiao Shirley Zeng, Associate AnalystMoody’s Investors [email protected]+65.6398.8318
Graeme Knowd, MD-BankingMoody’s Investors [email protected]+65.6311.2629
6 20 July 2020 Inside ASEAN: 20th Edition, July 2020
FEATURE ARTICLES INDONESIA
Indonesia Asahan Aluminium (Persero) (P.T.): Elevated leverage, weakerperformance of subsidiaries and volatile commodity prices constrainInalum's credit qualityOriginally published on 07 May 2020
» Refinancing adds debt to holding company which could ultimately be serviced by Bukit Asam. Indonesia Asahan Aluminium(Persero) (P.T.)’s (Inalum, Baa2 negative) planned US dollar bond issuance will increase the holding company's proportion of totalgroup debt. The new USD notes issue should reduce the group's cost of borrowing and extend debt maturities through refinancingexisting debt at Inalum and subsidiaries. Inalum relies on dividends from subsidiaries, mainly 66%-owned coal-mining subsidiary PTBukit Asam (Persero) Tbk, to meet its debt-servicing obligations. In effect, Bukit Asam dividends would service debt at the holdingcompany and other group companies.
» Support from Indonesia’s government mitigates structural subordination risk. The Government of Indonesia (Baa2stable) has designated Inalum as the holding company for the country’s metals and mining assets. We expect support from thegovernment, if required, to flow to Inalum directly, which mitigates structural subordination risk for Inalum bondholders.
» Cash flow from Bukit Asam underpins Inalum’s ba2 Baseline Credit Assessment. Bukit Asam can increase its dividends toInalum, if required, without a change in its own credit profile. We rate Inalum on a fully consolidated basis, reflecting its 65%-66%ownership of its three operating subsidiaries – Bukit Asam, PT Aneka Tambang (Persero) Tbk (ANTAM) and PT Timah (Persero) Tbk.However, Bukit Asam will contribute over 90% of the dividends at Inalum over 2020-22, until PT Freeport Indonesia (51.2% owned)starts contributing meaningful dividends.
» Timah’s business-model change doubles tin volumes, but leads to margin pressure. In 2019, Timah has shifted from beinga pure tin miner to becoming an aggregator of tin exports from Indonesia, working with private miners to refine and export theiroutput. However, profit margins on refining tin from private miners have been low, resulting in quarterly losses in 2019. We expectearnings will remain weak, keeping Timah's leverage elevated at 7.6x-7.8x over the next two years.
» ANTAM's timely execution on its downstream expansion plans is imperative in the face of metal-ore export bans.Indonesia’s export controls on various metal ores will constrain ANTAM’s ability to sell metal ores overseas, which could lead torevenue declines. As a result, the company needs to increase its downstream refining capacity to absorb its metal-ore output, andprotect margins.
» Consolidated leverage increases on production constraints and weak commodity prices. Lower margins amid weakcommodity prices and higher working capital requirements, mainly at ANTAM and Timah, drive elevated consolidated leverageto about 8.0x in 2020. Under our current commodity price sensitivities, leverage will remain elevated at 8.0x-8.5x through 2022,and improve to about 6.0x in 2023 once dividends from PTFI become a material source of cash flow and EBITDA for Inalum. Therewould be downward pressure on Inalum's rating if there are delays in executing the company's deleveraging through earningsgrowth. Despite high leverage, government support will continue to underpin its credit quality.
7 20 July 2020 Inside ASEAN: 20th Edition, July 2020
Exhibit 1
86% of Inalum’s consolidated debt is at the holding company
60% [1]
Revenue
Adj. EBITDA [2] Revenue
Adj. Debt Adj. EBITDA
On-lent to subs Adj. Debt
Cash and deposits
65% 66% 65%
Revenue Revenue Revenue
Adj. EBITDA Adj. EBITDA Adj. EBITDA
Adj. Debt Adj. Debt Adj. Debt
On-lent from Inalum On-lent from Inalum On-lent from Inalum
Government of Indonesia Papua Government & Mimika Regency
100% 40% [1]
Inalum (standalone)Inalum (Persero) (P.T.)
PT Indonesia Papua Mineral dan Metal
FY19 FY20 (F)
Copper, gold, silver
Aneka Tambang Bukit Asam Timah
Freeport-McMoran, Inc.
Ba1 Stable
25%
26.23%PT Freeport Indonesia
48.8%
5,415
833
6,427
759
501
89
4,034
FY19 FY20 (F)
Aluminium
414
37
5,695
900
FY19
FY19
FY20 (F)
FY20 (F)
5,703
890
5,847
1,510
1,134
104 244
2,238
224
2,314 1,541
488 468
1,629
FY19 FY20 (F)
1,365
Nickel ore, ferronickel, alumina, gold Coal Tin
212 206
-
860 307
500
741 215
400
53
[1] As of 31 December 2019, Inalum still owned 100% of PT Indonesia Papua Mineral dan Metal (IPMM). Its stake will likely be diluted to the Papua government and Mimika Regency byend-2020. Subsequently, the Papua government and Mimika Regency will own about 10% of PTFI through their shareholding in IPMM.[2] Inalum standalone EBITDA excludes dividends from subsidiariesFX rates: Revenue and EBITDA at USD:IDR 14,138; debt and cash at USD:IDR 13,883.Sources: Company information and Moody's Investors Service estimates
Nidhi Dhruv, CFA, VP-Senior AnalystMoody’s Investors [email protected]+65.6398.8315
Yu Sheng Tay, Associate AnalystMoody’s Investors [email protected]+65.6311.2652
Annalisa Di Chiara, Senior Vice PresidentMoody’s Investors [email protected]+852.3758.1537
Ian Lewis, Associate Managing DirectorMoody’s Investors [email protected]+65.6311.2676
8 20 July 2020 Inside ASEAN: 20th Edition, July 2020
FEATURE ARTICLES CAMBODIA
Government of Cambodia – B2 stable: Annual credit analysisOriginally published on 20 May 2020
The credit profile of Cambodia (B2 stable) reflects its solid GDP growth prospects and moderate and highly affordable governmentdebt. These factors are balanced by potential risks to financial stability, a weak institutional framework and political risks.
Disruptions caused by the coronavirus outbreak will significantly slow economic activity in China (A1 stable), with which Cambodiahas strong economic linkages, adversely affecting investment and tourism. Moreover, the deep economic slump in the European Union(Aaa stable) and the US (Aaa stable) – both large export markets for Cambodia – will also hurt demand. We expect real GDP growth inCambodia to contract by 0.3% in 2020, before recovering to close to 6.0% in 2021.
Bank lending has been growing at more than twice the rate of nominal GDP for most of the last decade, fueled by lending toconstruction, real estate, and mortgages, partly driven by foreign demand. Although there are ongoing efforts by authorities to containspillover risks from the real estate sector to the domestic economy, a sharp decline in asset prices – possibly triggered by weakereconomic conditions abroad – could pose economic and financial stability risks.
The stable outlook balances vulnerability to shocks stemming from a temporary disruption in growth, high dollarization and rapid creditgrowth, against mitigating factors such as strong growth potential, robust government revenue generation and the concessional andlong-term nature of government debt.
We would consider upgrading the rating if reforms were implemented that addressed institutional weaknesses and enhanced policyeffectiveness. Structural reforms to boost competitiveness and reduce hurdles to doing business would also be credit positive becauseit would contribute to an increase in economic diversification and incomes.
Trigger for downward rating action would arise from a sharp slowdown in credit growth that presented contagion effects for thedomestic economy. We would also consider downgrading the rating if foreign direct investment inflows fell sharply for a sustainedperiod, which would contribute to significantly lower GDP growth prospects and raise pressure on financing of the current accountdeficit.
This credit analysis elaborates on Cambodia’s credit profile in terms of economic strength, institutions and governance strength, fiscalstrength and susceptibility to event risk, which are the four main analytic factors in our Sovereign Ratings Methodology.
Anushka Shah, VP-Senior AnalystMoody’s Investors [email protected]+65.6398.3710
Caleb Coppersmith, Associate AnalystMoody’s Investors [email protected]+65.6398.8302
Gene Fang, Associate Managing DirectorMoody’s Investors [email protected]+65.6398.8311
Marie Diron, MD-Sovereign RiskMoody’s Investors [email protected]+65.6398.8310
9 20 July 2020 Inside ASEAN: 20th Edition, July 2020
FEATURE ARTICLES PHILIPPINES
Government of the Philippines – Baa2 stable: Update following ratingaffirmation, outlook unchangedOriginally published on 17 July 2020
On 16 July 2020, we have affirmed the Government of the Philippines' long-term local and foreign currency issuer and seniorunsecured debt ratings at Baa2. The outlook has been maintained at stable.
The rating affirmation and stable outlook reflect Moody's view that the fortification of the government's fiscal position in recent yearsprovides a buffer against a rise in public indebtedness due to shocks such as the ongoing global coronavirus outbreak. Relatedly, thetrack record of prudent economic and fiscal management, and a robust banking system, contribute to stable access to funding atmoderate costs and support prospects for fiscal consolidation and debt stabilization after the shock subsides.
At the same time, beyond proposed legislation aimed at facilitating the near-term recovery from the pandemic shock, Moody's expectsthat more structural economic and fiscal reforms will be on hold for some time, delaying potential further improvements in thePhilippines' credit profile. And in contrast to strong policy effectiveness, governance weaknesses especially with regards to perceivedconstraints on civil society and the judiciary, continue to weigh on the rating.
Moody's has also affirmed the government's foreign currency senior unsecured shelf rating at (P)Baa2 and the senior unsecured ratingsfor the liabilities of the country's central bank, Bangko Sentral ng Pilipinas (BSP), at Baa2. In Moody's view, the credit quality of thecentral bank is closely aligned with that of the government.
The Philippines' country ceilings remain unchanged. The long-term foreign currency bond ceiling remains at A3, and the short-termforeign currency bond ceiling at P-2. The long-term foreign currency deposit ceiling remains at Baa2, and the short-term foreigncurrency deposit ceiling at P-2. Furthermore, the long-term local currency bond and deposit ceilings remain unchanged at A2.
Exhibit 1
The Philippines' credit profile is determined by four factors
Economic
strength
Institutions and
governance strength
Fiscal
strength
Susceptibility
to event risk
a3 baa1 ba1 baa
A3 - Baa2
Economic resiliency
a3
Government financial strength
a3
Scorecard-indicated outcome
Source: Moody's Investors Service
10 20 July 2020 Inside ASEAN: 20th Edition, July 2020
Rating outlookThe stable outlook reflects the view that the recovery from the acute shock posed by the coronavirus outbreak will restore rapideconomic growth relative to peers, complemented by the stabilization and eventual reversal of the deterioration in fiscal and debtmetrics.
This scenario is balanced against the risk that the economy’s potential is hit more significantly than we currently estimate and/or thatfiscal and economic reform momentum does not resume, leaving the Philippines economic and fiscal strength somewhat weaker.In particular, the near- to medium-term economic outlook remains uncertain given the persistence of coronavirus infections bothdomestically and globally, especially among the Philippines’ largest trading partners and key destinations and sectors for overseas labor.Continued domestic transmission poses risks of a wider return to stricter lockdown conditions, impeding the recovery projected tocommence during the second half of 2020. Lower remittances from overseas Filipinos could also weigh on incomes and consumptionto a greater extent than we currently estimate.
Factors that could lead to an upgradeFactors that would prompt an upgrade of the Philippines' sovereign rating include evidence of a more rapid reversal of the deteriorationin fiscal and debt metrics stemming from the coronavirus shock. This would likely entail a sustained restoration of economic growthto rates similar to those recorded prior to the outbreak. Together, a resumption of sustained high growth and rapid restoration of fiscalstrength would denote particularly effective macroeconomic and fiscal policy.
Factors that could lead to a downgradeFactors that would prompt a downgrade of the Philippines' sovereign rating include the emergence of macroeconomic instability thatwould lead to a greater deterioration in fiscal and government debt metrics and/or an erosion of the country's external paymentsposition. The reversal of reforms that have supported prior gains in economic and fiscal strength would also likely lead to a downgrade.A material deterioration of institutions and governance strength, with signs of erosion in the quality of legislative and executiveinstitutions, would also be negative.
Christian de Guzman, Senior Vice PresidentMoody’s Investors [email protected]+65.6398.8327
Gene Fang, Associate Managing DirectorMoody’s Investors [email protected]+65.6398.8311
Marie Diron, MD-Sovereign/Sub SovereignMoody’s Investors [email protected]+65.6398.8310
11 20 July 2020 Inside ASEAN: 20th Edition, July 2020
FEATURE ARTICLES SINGAPORE
DBS, OCBC and UOB: Q1 2020 update: Results point to furtherweakening of asset quality and profitabilityOriginally published on 11 May 2020
SummarySingapore's three largest banks by assets – DBS Bank Ltd. (DBS, Aa1/Aa1 stable, a1)1, Oversea-Chinese Banking Corp Ltd (OCBC,Aa1/Aa1 stable, a1) and United Overseas Bank Limited (UOB, Aa1/Aa1 stable, a1) – posted year-on-year declines of 19%-43% in netprofit for the first quarter of 2020 due to increases in credit provisions. Asset quality during the quarter was stable but will weakenconsiderably as macroeconomic conditions worsen due to the outbreak of the coronavirus. As a result, profitability will further weaken.Yet liquidity will remain strong as deposits grow.
» Nonperforming loans (NPLs) will increase as macroeconomic conditions weaken. In the three months through the endof March 2020, NPL ratios rose about 10 basis points to 1.6% at DBS and UOB, and to 1.5% at OCBC. OCBC expects that NPLswill jump to 2.5%-3.5% by the end of 2021, subject to the effectiveness of government support measures. At DBS and UOB, 12%of total loans are to industries that are vulnerable to prolonged disruptions from the coronavirus outbreak, such as oil and gas,hospitality, transportation, trade, retail, and food and beverage.
» Profitability will weaken markedly in 2020-21. In the first quarter, OCBC underperformed the other two because of large mark-to-market losses at Great Eastern Holdings, its insurance subsidiary, while DBS posted the strongest growth in pre-provision income,helped by trading gains and fees. All three banks expect net interest margins (NIMs) will decline due to monetary policy easing, andcredit costs will increase. They project cumulative credit costs will jump to 1.2%-1.3% of gross loans in 2020-21 from 0.2%-0.3% in2019. This will lead to a significant deterioration of profitability.
» Capitalization will remain strong. The three banks' Common Equity Tier 1 (CET1) ratios remained high, at an average of 14.1% atthe end of March. Capital ratios will come under mild pressure in the next two years because increases in credit risks will inflate risk-weighted assets (RWA).
» Liquidity will stay robust. The three banks' loan-to-deposit ratios (LDRs) remained comfortably below 90%, with DBS postinga marked decline. The banks also reported healthy liquidity coverage ratios (LCRs) and net stable funding ratios (NSFRs). CASAratios improved at OCBC and UOB. We expect that liquidity will remain strong because of healthy inflows of domestic and foreigndeposits, and very limited loan growth.
Endnotes1 In this report, all data and ratios for DBS are for DBS Group Holdings Ltd
Eugene Tarzimanov, VP-Sr Credit OfficerMoody’s Investors [email protected]+65.6398.8329
Alka Anbarasu, VP-Sr Credit OfficerMoody’s Investors [email protected]+65.6398.3712
Heejin Lee, Associate AnalystMoody’s Investors [email protected]+65.6311.2601
Randall Ho, Associate AnalystMoody’s Investors [email protected]+65.6311.2603
12 20 July 2020 Inside ASEAN: 20th Edition, July 2020
FEATURE ARTICLES SINGAPORE
REITs – Singapore: Easing of regulatory rules will support cash flow andliquidity, a credit positiveOriginally published on 21 April 2020
On 16 April, the Monetary Authority of Singapore (MAS) announced a series of measures to provide relief to Singapore real estateinvestment trusts (S-REITs) - a sector severely impacted by the rapid and widening spread of the coronavirus outbreak.
Among the measures, the MAS has extended the deadline for S-REITs to distribute dividends. S-REITs can defer dividends that areattributable to fiscal 20201 earnings for up to 12 months from the end of their respective fiscal year. Previously a REIT had to distributedividends within three months of its fiscal year-end to retain its status as a REIT.
The deferral of dividend payments is credit positive because it will allow the S-REITs to preserve cash and support their liquidity amiddifficult operating conditions caused by the coronavirus outbreak.
On average, dividends have constituted around 74% of EBITDA for the rated companies since 2016. The deferment of dividend payoutswill enable S-REITs to continue to service their interest obligations despite lower cash flows.
We expect S-REITs' cash flows to decline significantly in 2020 as they support their tenants by way of rental deferment, rebates, orboth. For example, some of the retail REITs have announced rent waivers that amount to at least one month of revenue. In addition,the closure of nonessential services in Singapore will weaken the earnings and cash flow of the REITs' tenants, possibly forcing thetenants to delay their rent payments. This in turn will pressure the REITs’ earnings and cash flows. However, S-REITs will continue toincur interest and operating expenses despite the fall in earnings.
The MAS has increased the debt-to-assets leverage ceiling for S-REITs in a second measure to support the sector. The easing of theleverage requirement will help S-REITs remain compliant with the regulatory ceiling, which typically is a maintenance covenant forbank loans, despite potential asset devaluations.
A weak global economic outlook as well as the rising trends of remote working and online shopping will hurt demand for industrial,office and retail space, which in turn could lead to declines in asset values.
S-REITS can now borrow up to 50% of their total deposited assets, compared with the earlier limit of 45%. MAS had in July 2019proposed to allow S-REITs to borrow up to 50% of their deposited assets only if they could meet a minimum interest coveragerequirement of 2.5x. However, MAS has deferred the minimum interest coverage ratio requirement for the S-REITs until January 2022.
Most of the rated S-REITs had ample capacity even under the previous 45% leverage ceiling. But S-REITs will have a bigger buffer towithstand coronavirus disruptions under the new 50% leverage ceiling.
Nonetheless, any permanent increase in debt in response to the higher borrowing limit would be credit negative for the rated S-REITs.The rated S-REITs have little or no capacity for incremental borrowings under their net debt/EBITDA downgrade thresholds at currentrating levels.
13 20 July 2020 Inside ASEAN: 20th Edition, July 2020
Endnotes1 Fiscal year ending 31 March 2020, 30 September 2020 or 31 December 2020, as the case may be for the individual REIT.
Sweta Patodia, AnalystMoody’s Investors [email protected]+65.6398.8317
Junling Tan, AnalystMoody’s Investors [email protected]+65.6311.2654
Jacintha Poh, VP-Sr Credit OfficerMoody’s Investors [email protected]+65.6398.8320
14 20 July 2020 Inside ASEAN: 20th Edition, July 2020
ASEAN Snapshot & DashboardsMacroeconomic forecasts and sovereign rating history
Exhibit 1
Sovereign rating history
Cambodia Indonesia Laos Malaysia Philippines Singapore Thailand Vietnam
B2
Ba3
Ba1
Baa2
A3
A1
Aa2
Aaa
Source: Moody's Investors Service
Exhibit 2
Real GDP (% change)
-6
-4
-2
0
2
4
6
8
10
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020F 2021F
Re
al G
DP
(%
ch
an
ge
)
Cambodia, B2 Indonesia, Baa2 Laos, B3 Malaysia, A3 Philippines, Baa2 Singapore, Aaa Thailand, Baa1 Vietnam, Ba3
> 10
Source: Moody's Investors Service
Exhibit 3
Current account balance/GDP (%)
-20
-15
-10
-5
0
5
10
15
20
25
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020F 2021F
Curr
en
t accoun
t bla
nace / G
DP
%
Cambodia, B2 Indonesia, Baa2 Laos, B3 Malaysia, A3 Philippines, Baa2 Singapore, Aaa Thailand, Baa1 Vietnam, Ba3
Source: Moody's Investors Service
15 20 July 2020 Inside ASEAN: 20th Edition, July 2020
Exhibit 4
Inflation rate (CPI, % change Dec/Dec)
-2
0
2
4
6
8
10
12
14
16
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020F 2021F
Infla
tio
n r
ate
(C
PI,
% c
ha
ng
e)
Cambodia, B2 Indonesia, Baa2 Laos, B3 Malaysia, A3 Philippines, Baa2 Singapore, Aaa Thailand, Baa1 Vietnam, Ba3
>
Source: Moody's Investors Service
Exhibit 5
10-year Government bond yields
0
2
4
6
8
10
12
14
Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Jul-16 Jan-17 Jul-17 Jan-18 Jul-18 Jan-19 Jul-19 Jan-20 Jul-20
Bon
d y
ield
s %
Indonesia Malaysia Philippines Singapore Thailand Vietnam
Source: Bloomberg, Moody’s Investors Service
Exhibit 6
Foreign exchange rates(rebased January 2012)
85
95
105
115
125
135
145
155
165
175
185
Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Jul-16 Jan-17 Jul-17 Jan-18 Jul-18 Jan-19 Jul-19 Jan-20 Jul-20
Fo
reig
n e
xch
an
ge
ra
tes (
reb
ase
d J
an
20
12
)
USD IDR USD MYR USD PHP USD SGD USD THB USD VND
Source: Bloomberg, Moody’s Investors Service
16 20 July 2020 Inside ASEAN: 20th Edition, July 2020
Issuance SnapshotAs of 13 July 2020Exhibit 7
Domestic bond issuance by domicile of issuersExhibit 8
Domestic bond issuance by type of issuers
0
20
40
60
80
2013 2014 2015 2016 2017 2018 2019 YTD 2020
$ b
illio
ns
Cambodia Indonesia Malaysia Philippines Singapore Thailand Vietnam
Source: Moody’s Investors Service, Dealogic
0
20
40
60
80
2013 2014 2015 2016 2017 2018 2019 YTD 2020
$ b
illio
ns
Corporates FIG Sovereign Sovereign-ADB*
*ADB: Asian Development BankSource: Moody’s Investors Service, Dealogic
Exhibit 9
Cross border bond issuance by domicile of issuersExhibit 10
Cross border bond issuance by type of issuers
0
20
40
60
80
2013 2014 2015 2016 2017 2018 2019 YTD 2020
$ b
illio
ns
Cambodia Indonesia Malaysia Philippines Singapore Thailand Vietnam
Source: Moody’s Investors Service, Dealogic
0
20
40
60
80
2013 2014 2015 2016 2017 2018 2019 YTD 2020$
bill
ions
Corporates FIG Sovereign Sovereign-ADB*
* ADB: Asian Development BankSource: Moody’s Investors Service, Dealogic
Non-financial corporates and project and public finance rated portfolio
Exhibit 11
ASEAN non-financial corporates and project and public finance rated portfolio remains stable in 2020
0
10
20
30
40
50
60
70
80
90
100
Dec-09 Dec-10 Dec-11 Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 Dec-17 Dec-18 Dec-19 Jul-20
Corporate Project & Infrastructure Finance
Source: Moody’s Investors Service
17 20 July 2020 Inside ASEAN: 20th Edition, July 2020
Exhibit 12
Number of downgrade actions remains high in 2020
3.0
0.8 0.4 0.9 1.4 1.1 1.62.5
1.4 1.0
11.0
24.0
0.0
5.0
10.0
15.0
20.0
25.0
30.0
0
5
10
15
20
25
30
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 YTD 2020
Nu
mb
er
of ra
tin
g a
ctio
ns
Downgrades Upgrades Down-/Upgrades Ratio
Note: the ratio is calculated on the rating actions taken on non-financial corporates and project and public finance issuersSource: Moody’s Investors Service
Exhibit 13
Proportion of ratings with a negative bias increased in 2020
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
-60
-40
-20
0
20
40
60
80
100
Dec-09 Dec-10 Dec-11 Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 Dec-17 Dec-18 Dec-19 Jul-20
POS RUR-Upgrade RUR Uncertain STA RUR-Downgrade NEG DEV %Negative Bias (right axis)
Note: Outlooks assigned to ASEAN-based non-financial corporates and project and public finance issuersSource: Moody’s Investors Service
Banking System Indicators
Exhibit 14
Aggregate problem loans to gross loans
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
9.0%
10.0%
Philippines Singapore Malaysia Thailand Vietnam Indonesia
2014 YE 2015 YE 2016 YE 2017 YE 2018 YE 2019 YE 2020 Q1
Source: Moody’s Investors Service
18 20 July 2020 Inside ASEAN: 20th Edition, July 2020
Exhibit 15
Aggregate tangible common equity to risk-weighted assets
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
18.0%
20.0%
Vietnam Philippines Thailand Malaysia Singapore Indonesia
2014 YE 2015 YE 2016 YE 2017 YE 2018 YE 2019 YE 2020 Q1
Source: Moody’s Investors Service
Exhibit 16
Aggregate net income to tangible assets
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
Philippines Malaysia Singapore Thailand Vietnam Indonesia
2014 YE 2015 YE 2016 YE 2017 YE 2018 YE 2019 YE 2020 Q1
Source: Moody’s Investors Service
19 20 July 2020 Inside ASEAN: 20th Edition, July 2020
Appendix I Related Moody's ResearchSelected Sovereign Research
» Government of Singapore – Aaa stable: Annual credit analysis, July 2020
» Moody's places Laos's B3 ratings on review for downgrade, June 2020
» Government of Vietnam – Ba3 negative: Annual credit analysis, May 2020
» Moody's changes Thailand's rating outlook to stable from positive; affirms Baa1 ratings, April 2020
Selected Corporate Sector Research
» Gaming – Asia Pacific: Virus-induced earnings plunge will keep leverage elevated; liquidity mostly sufficient, June 2020
» PLDT Inc.: Proposed bond issuance reduces refinancing risk, a credit positive, but leverage will stay elevated, June 2020
» High-yield nonfinancial companies – Asia (ex Japan) : Growing number of B3 negative and lower rated companies points to moredefaults, May 2020
» Nonfinancial companies – Asia (ex Japan): Rated companies can address most of their $569 billion bond maturities through 2021,May 2020
» Weak liquidity, untenable capital structure drove 2 distressed exchanges in 1Q 2020, May 2020
Selected Financial Institutions Research
» Banks – ASEAN and India: Asset quality, profitability will weaken as economic challenges grow, July 2020
» Financial Institutions – Singapore: Singapore's proposed environmental risk guidelines for financial institutions are credit positive,July 2020
» Toronto Dominion (South East Asia) Limited: New Issuer, June 2020
» Bank of the Philippine Islands: Update to credit analysis, May 2020
» Financial Institutions – Singapore: Support measures will provide relief to banks amid the coronavirus outbreak, April 2020
» Banks – Malaysia: Regulations will soften economic shock from coronavirus but raise risks for banks, April 2020
» Banking System Outlook Update - The Philippines: Outlook changed to negative as coronavirus outbreak poses unprecedentedchallenges, April 2020
Other Related Research
» Covered Bonds – Asia Pacific: Coronavirus disruptions are negative, but overall credit quality will remain high, June 2020
» Infrastructure & Project Finance – Asia: Most rated companies can manage bond maturity refinancing risks through 2022, May 2020
To access any of these reports, click on the entry above. Note that these references are current as of the date of publication of thisreport and that more recent reports may be available. All research may not be available to all clients.
20 20 July 2020 Inside ASEAN: 20th Edition, July 2020
Appendix II List of Rated ASEAN Issuers as of 15 July 2020Cambodia
Exhibit 1
Issuer Sector Rating OutlookCambodia Sovereign B2 StableCorporates NagaCorp Ltd. Gaming B1 Negative
*Country is defined as country of principal operation or center of management decision-making rather than country of domicile or listing.Source: Moody's Investors Service
Indonesia
Exhibit 2
Issuer Sector Rating OutlookIndonesia Sovereign Baa2 StableCorporates ABM Investama Tbk (P.T.) Mining B1 NegativeAdaro Indonesia (P.T.) Mining Ba1 StableAgung Podomoro Land Tbk (P.T.) Homebuilding B3 NegativeAlam Sutera Realty Tbk Homebuilding Caa1 NegativeBarito Pacific Tbk (P.T.) Chemical B1 StableBayan Resources Tbk (P.T.) Mining Ba3 StableBuana Lintas Lautan Tbk (P.T.) Shipping B1 StableBukit Makmur Mandiri Utama (P.T.) Services Ba3 NegativeBumi Resources Tbk (P.T.) Mining Caa1 NegativeBumi Serpong Damai TBK (P.T.) Homebuilding Ba3 StableChandra Asri Petrochemical Tbk (P.T.) Chemical Ba3 StableGajah Tunggal Tbk (P.T.) Automotive Supplier Caa1 NegativeGolden Energy And Resources Ltd Mining B1 StableGeo Energy Resources Limited Mining Caa3 NegativeIndonesia Asahan Aluminium (Persero) (P.T.) Mining Baa2 NegativeIndika Energy Tbk (P.T.) Mining Ba3 NegativeIndosat Tbk. (P.T.) Telecommunications Baa3 NegativeLippo Karawaci Tbk (P.T.) Homebuilding B3 StableLippo Malls Indonesia Retail Trust REITs B1 NegativeMedco Energi Internasional Tbk (P.T.) O&G - Independent E & P B1 NegativeMNC Investama Tbk. (P.T.) Holding Company Caa1 NegativeModernland Realty Tbk (P.T.) Homebuilding Ca NegativePakuwon Jati, Tbk (P.T.) Homebuilding Ba2 StablePan Brothers Tbk (P.T.) Manufacturing B3 NegativePertamina (Persero) (P.T.) O&G - Integrated Baa2 StableProfesional Telekomunikasi Indonesia Telecom Infrastructure Baa3 StableSaka Energi Indonesia (P.T.) O&G - Independent E & P B1 NegativeSawit Sumbermas Sarana Tbk (P.T.) Protein and Agriculture B3 NegativeSoechi Lines Tbk. (P.T.) Shipping B1 NegativeSri Rejeki Isman (P.T.) Manufacturing Ba3 NegativeTelekomunikasi Indonesia (P.T.) Telecommunications Baa1 StableTelekomunikasi Selular (P.T.) Telecommunications Baa1 StableTunas Baru Lampung Tbk (P.T.) Protein and Agriculture Ba3 NegativeUnited Tractors Tbk (P.T.) Heavy Equipment & Mining Baa2 StableWijaya Karya (Persero) Tbk. (P.T.) Construction Ba3 NegativeXL Axiata Tbk (P.T.) Telecommunications Baa3 StableFinancial Institutions Adira Dinamika Multi Finance Tbk (P.T.) Finance Company Baa2 StableAstra Sedaya Finance (P.T.) Finance Company Baa2 StableBank Central Asia Tbk (P.T.) Bank Baa2 Stable
21 20 July 2020 Inside ASEAN: 20th Edition, July 2020
Bank Danamon Indonesia Tbk (P.T.) Bank Baa2 StableBank Mandiri (P.T.) Bank Baa2 StableBank Negara Indonesia Tbk (P.T.) Bank Baa2 StableBank Permata Tbk (P.T.) Bank Baa2 StableBank Rakyat Indonesia (P.T.) Bank Baa2 StableBank Tabungan Negara (P.T.) Bank Baa2 StableFederal International Finance (P.T.) Finance Company Baa2 StableLembaga Pembiayaan Ekspor Indonesia Bank Baa2 StablePan Indonesia Bank Tbk (P.T.) Bank Baa3 StablePT Bank CIMB Niaga Tbk Bank Baa2 StableInfrastructure & Project Finance Cikarang Listrindo (P.T.) Electricity Production Ba2 PositiveHutama Karya (Persero) (P.T.) Toll Roads Baa3 StableJasa Marga (Persero) Tbk (PT) Toll Roads Baa3 NegativeLLPL Capital Pte Ltd Electricity Production Baa3 StableMinejesa Capital BV Electricity Production Baa3 StablePelabuhan Indonesia II (Persero) (P.T.) Ports Baa3 StablePelabuhan Indonesia III (Persero) (P.T.) Ports Baa3 StablePerusahaan Gas Negara (PT) Regulated Energy Utilities Baa2 StablePerusahaan Listrik Negara (PT) Regulated Energy Utilities Baa2 StableStar Energy Geothermal (Wayang Windu) Limited Electricity Production Ba3 StableStructured FinanceTLFF I Pte. Ltd. Other - Structured Notes Aaa -
*Country is defined as country of principal operation or center of management decision-making rather than country of domicile or listing.Source: Moody's Investors Service
Laos
Exhibit 3
Issuer Sector Rating OutlookLaos Sovereign B3 RUR
*Country is defined as country of principal operation or center of management decision-making rather than country of domicile or listing.Source: Moody's Investors Service
Malaysia
Exhibit 4
Issuer Sector Rating OutlookMalaysia Sovereign A3 StableState of Sarawak Quasi-sovereign A3 NegativeCorporates Axiata Group Berhad Telecommunications Baa2 StableGenting Berhad Gaming Baa2 NegativeGenting Overseas Holdings Limited Gaming Baa2 NegativeIOI Corporation Berhad Protein and Agriculture Baa2 StableMISC Berhad Shipping Baa2 StablePetroliam Nasional Berhad O&G - Integrated A2 StablePetronas LNG Trading Company Baa1 StablePress Metal Aluminium Holdings Berhad Metals Ba3 NegativeSime Darby Plantation Berhad Protein and Agriculture Baa2 StableTelekom Malaysia Berhad Telecommunications A3 StableFinancial Institutions AmBank (M) Berhad Bank A3 StableCagamas Berhad Non Captive Finance A3 StableCIMB Bank Berhad Bank A3 StableCIMB Group Holdings Berhad Bank Baa1 Stable
22 20 July 2020 Inside ASEAN: 20th Edition, July 2020
CIMB Investment Bank Bank A3 StableCIMB Islamic Bank Berhad Bank A3 Stable EXIM Sukuk Malaysia Berhad Bank A3 StableExport-Import Bank of Malaysia Berhad Non Captive Finance A3 StableHong Leong Bank Berhad Bank A3 StableHSBC Bank Malaysia Berhad Bank A3 StableMalayan Banking Berhad Bank A3 StablePublic Bank Berhad Bank A3 StableRHB Bank Berhad Bank A3 StableStandard Chartered Bank Malaysia Berhad Bank Baa1 StableInfrastructure & Project Finance Malaysia Airports Holdings Berhad Airports A3 NegativeTenaga Nasional Berhad Regulated Energy Utilities A3 Stable
*Country is defined as country of principal operation or center of management decision-making rather than country of domicile or listing.Source: Moody's Investors Service
Philippines
Exhibit 5
Issuer Sector Rating OutlookPhilippines Sovereign Baa2 StableCorporates PLDT Inc. Telecommunications Baa2 StableFinancial Institutions Bank of the Philippine Islands Bank Baa2 StableBDO Unibank, Inc Bank Baa2 Stable China Banking Corporation Bank Baa2 Stable Land Bank of The Philippines Bank Baa2 StableMetropolitan Bank & Trust Company Bank Baa2 StablePhilippine National Bank Bank Baa2 StableRizal Commercial Banking Corporation Bank Baa2 StableSecurity Bank Corporation Bank Baa2 StableUnion Bank of the Philippines Bank Baa2 StableUnited Coconut Planters Bank Bank Ba3 StableInfrastructure & Project Finance Power Sector Assets & Liabilities Mgmnt Corp. Regulated Energy Utilities Baa2 StableNational Power Corporation Regulated Energy Utilities Baa2 Stable
*Country is defined as country of principal operation or center of management decision-making rather than country of domicile or listing.Source: Moody's Investors Service
Singapore
Exhibit 6
Issuer Sector Rating OutlookSingapore Sovereign Aaa StableHousing Development Board Quasi-sovereign Aaa StableNational University of Singapore Quasi-sovereign Aaa StableSingapore Management University Quasi-sovereign Aaa StableCorporates Ascendas Real Estate Investment Trust S-REIT A3 StableAscott Residence Trust S-REIT Baa3 NegativeCapitaLand Commercial Trust S-REIT Baa2 RURCapitaLand Mall Trust S-REIT A2 RURFrasers Centrepoint Trust S-REIT Baa2 NegativeFrasers Commercial Trust S-REIT Baa2 NegativeFrasers Hospitality Trust S-REIT Baa3 Negative
23 20 July 2020 Inside ASEAN: 20th Edition, July 2020
Genting Singapore Limited Gaming A3 NegativeIBC Capital Limited Business Service B2 RURMapletree Commercial Trust S-REIT Baa1 NegativeMapletree North Asia Commercial Trust S-REIT Baa3 NegativeMapletree Logistics Trust S-REIT Baa2 StableParkway Life REIT S-REIT Baa2 StableSingapore Technologies Engineering Ltd. Aerospace / Defense Aaa StableSingapore Telecommunications Limited Telecommunications A1 NegativeTemasek Holdings (Private) Limited Investment Company Aaa StableFinancial Institutions Bank of Singapore Limited Bank Aa1 StableDBS Bank Ltd Bank Aa1 StableDBS Group Holdings Ltd Bank Holding Company Aa2 StableOversea-Chinese Banking Corporation Limited Bank Aa1 StableStandard Chartered Bank (Singapore) Limited Bank A1 StableToronto Dominion (South East Asia) Limited Bank A1 StableUnited Overseas Bank Limited Bank Aa1 StableInfrastructure & Project Finance PSA International Pte. Ltd. Ports Aa1 StableSingapore Power Limited Regulated Energy Utilities Aa2 StableSP PowerAssets Ltd Regulated Energy Networks Aa2 StableStructured Finance DBS Bank Ltd. Global Covered Bond Programme Covered Bonds Aaa -Oversea-Chinese Banking Corporation Limited Global CoveredBond Programme
Covered Bonds Aaa -
United Overseas Bank Limited Global Covered BondProgramme
Covered Bonds Aaa -
*Country is defined as country of principal operation or center of management decision-making rather than country of domicile or listing.Source: Moody's Investors Service
Thailand
Exhibit 7
Issuer Sector Rating OutlookThailand Sovereign Baa1 StableCorporates PTT Exploration & Production Public Co. Ltd. O&G - Independent E & P Baa1 StablePTT Global Chemical Public Company Limited Chemical Baa2 StablePTT Public Company Limited O&G - Integrated Baa1 StableThai Beverage Public Company Limited Alcoholic Beverage Baa3 NegativeThai Oil Public Company Limited O&G - Refining & Marketing Baa2 NegativeFinancial Institutions Bangkok Bank Public Company Limited Bank Baa1 StableBank of Ayudhya Bank Baa1 StableCIMB Thai Bank Public Limited Company Bank Baa2 StableExport-Import Bank of Thailand Bank Baa1 StableGovernment Housing Bank of Thailand Bank Baa1 StableKASIKORNBANK Public Company Limited Bank Baa1 StableKrung Thai Bank Public Company Limited Bank Baa1 StableSiam Commercial Bank Public Company Limited Bank Baa1 StableStandard Chartered Bank (Thai) Public Co Ltd Bank Baa1 StableTMB Bank Public Company Limited Bank Baa1 StableUnited Overseas Bank (Thai) Public Co Ltd Bank Baa1 StableInfrastructure & Project Finance Ratch Group Public Company Limited Unregulated Energy Utilities Baa1 Stable
*Country is defined as country of principal operation or center of management decision-making rather than country of domicile or listing.Source: Moody's Investors Service
24 20 July 2020 Inside ASEAN: 20th Edition, July 2020
Vietnam
Exhibit 8
Issuer Sector Rating OutlookVietnam Sovereign Ba3 NegativeFinancial Institutions An Binh Commercial Joint Stock Bank Bank B1 NegativeAsia Commercial Bank Bank B1 NegativeHo Chi Minh City Development JSC Bank Bank B1 NegativeHome Credit Vietnam Finance Company Limited Non Captive Finance B3 RURJSC Bank for Foreign Trade of Vietnam Bank B1 NegativeJSC Bank for Investment & Development of Vietnam Bank B1 NegativeLien Viet Post Joint Stock Commercial Bank Bank B1 NegativeMilitary Commercial Joint Stock Bank Bank B1 NegativeNam A Commercial Joint Stock Bank Bank B2 StableOrient Commercial Joint Stock Bank Bank B1 Stable(m)Saigon – Hanoi Commercial Joint Stock Bank Bank B2 RURSaigon Thuong Tin Commercial Joint-Stock Bank Bank Caa1 StableSHBANK Finance Company Limited Non Captive Finance B3 RURSoutheast Asia Commercial Joint Stock Bank Bank B1 NegativeTien Phong Commercial Joint Stock Bank Bank B1 Stable(m)VPBank Finance Company Limited Non Captive Finance B1 RURVietnam Bank for Agriculture & Rural Development Bank B1 NegativeVietnam JSC Bank for Industry and Trade Bank B1 NegativeVietnam International Bank Bank B1 Stable(m)Vietnam Maritime Commercial Joint Stock Bank Bank B2 StableVietnam Prosperity Joint Stock Commercial Bank Bank B1 RURVietnam Technological and Commercial JSB Bank B1 NegativeInfrastructure & Project FinanceMong Duong Finance Holdings BV Electricity Production Ba3 Negative
*Country is defined as country of principal operation or center of management decision-making rather than country of domicile or listing.Source: Moody's Investors Service
25 20 July 2020 Inside ASEAN: 20th Edition, July 2020
Moody's ASEAN Contact List
Credit Strategy & Standards
Michael Taylor Managing Director +65.6311.2618 [email protected] Deborah Tan Assistant Vice President - Analyst +65 6311.2644 [email protected]
Sovereign
Marie Diron Managing Director +65.6398.8310 [email protected] Gene Fang Associate Managing Director +65 6398.8311 [email protected] Christian de Guzman Senior Vice President +65 6398.8327 [email protected] Martin Petch Vice President - Senior Credit Officer +65 6311.2671 [email protected] Anushka Shah Vice President - Senior Analyst +65 6398.3710 [email protected] Christian Fang Assistant Vice President - Analyst +65 6398.3727 [email protected] Michael Higgins Analyst +65 6311.2655 [email protected]
Financial Institutions
Graeme Knowd Managing Director +65 6311.2629 [email protected] Alka Anbarasu Vice President - Senior Credit Officer +65 6398.3712 [email protected] Eugene Tarzimanov Vice President - Senior Credit Officer +65 6398.8329 [email protected] Srikanth Vadlamani Vice President - Senior Credit Officer +65 6398.8336 [email protected] Jeffrey Lee Assistant Vice President - Analyst +65 6311.2649 [email protected] Rebaca Tan Assistant Vice President - Analyst +65 6311.2610 [email protected] Joyce Ong Analyst +65 6311.2608 [email protected] Tengfu Li Analyst +65 6311.2630 [email protected]
Corporate Finance
Laura Acres Managing Director +65 6398.8335 [email protected] Ian Lewis Associate Managing Director +65 6311.2676 [email protected] Vikas Halan Associate Managing Director +65 6398.8337 [email protected] Annalisa Di Chiara Senior Vice President +852 3758.1537 [email protected] Jacintha Poh Vice President - Senior Credit Officer +65 6398.8320 [email protected] Kaustubh Chaubal Vice President - Senior Credit Officer +65 6398.8332 [email protected] Nidhi Dhruv Vice President - Senior Analyst +65 6398.8315 [email protected] Maisam Hasnain Assistant Vice President - Analyst +65 6398.8325 [email protected] Hui Ting Sim Analyst +65 6311.2643 [email protected] Junling Tan Analyst +65 6311.2654 [email protected] Stephanie Cheong Analyst +65 6311.2606 [email protected] Sweta Patodia Analyst +65 6398.8317 [email protected]
Project & Infrastructure Finance
Terry Fanous Managing Director +65 6398.8307 [email protected] Ray Tay Senior Vice President +65 6398.8306 [email protected] Abhishek Tyagi Vice President - Senior Analyst +65 6398.8309 [email protected] Spencer Ng Vice President - Senior Analyst +65 6311.2625 [email protected]
Structured Finance
Dipanshu Rustagi Assistant Vice President - Analyst +65 6311.2605 [email protected]
26 20 July 2020 Inside ASEAN: 20th Edition, July 2020
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Moody’s Investors Service, Inc., a wholly-owned credit rating agency subsidiary of Moody’s Corporation (“MCO”), hereby discloses that most issuers of debt securities (includingcorporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by Moody’s Investors Service, Inc. have, prior to assignment of any credit rating,agreed to pay to Moody’s Investors Service, Inc. for credit ratings opinions and services rendered by it fees ranging from $1,000 to approximately $2,700,000. MCO and Moody’sinvestors Service also maintain policies and procedures to address the independence of Moody’s Investors Service credit ratings and credit rating processes. Information regardingcertain affiliations that may exist between directors of MCO and rated entities, and between entities who hold credit ratings from Moody’s Investors Service and have also publiclyreported to the SEC an ownership interest in MCO of more than 5%, is posted annually at www.moodys.com under the heading “Investor Relations — Corporate Governance —Director and Shareholder Affiliation Policy.”
Additional terms for Australia only: Any publication into Australia of this document is pursuant to the Australian Financial Services License of MOODY’S affiliate, Moody’s InvestorsService Pty Limited ABN 61 003 399 657AFSL 336969 and/or Moody’s Analytics Australia Pty Ltd ABN 94 105 136 972 AFSL 383569 (as applicable). This document is intendedto be provided only to “wholesale clients” within the meaning of section 761G of the Corporations Act 2001. By continuing to access this document from within Australia, yourepresent to MOODY’S that you are, or are accessing the document as a representative of, a “wholesale client” and that neither you nor the entity you represent will directly orindirectly disseminate this document or its contents to “retail clients” within the meaning of section 761G of the Corporations Act 2001. MOODY’S credit rating is an opinion as tothe creditworthiness of a debt obligation of the issuer, not on the equity securities of the issuer or any form of security that is available to retail investors.
Additional terms for Japan only: Moody's Japan K.K. (“MJKK”) is a wholly-owned credit rating agency subsidiary of Moody's Group Japan G.K., which is wholly-owned by Moody’sOverseas Holdings Inc., a wholly-owned subsidiary of MCO. Moody’s SF Japan K.K. (“MSFJ”) is a wholly-owned credit rating agency subsidiary of MJKK. MSFJ is not a NationallyRecognized Statistical Rating Organization (“NRSRO”). Therefore, credit ratings assigned by MSFJ are Non-NRSRO Credit Ratings. Non-NRSRO Credit Ratings are assigned by anentity that is not a NRSRO and, consequently, the rated obligation will not qualify for certain types of treatment under U.S. laws. MJKK and MSFJ are credit rating agencies registeredwith the Japan Financial Services Agency and their registration numbers are FSA Commissioner (Ratings) No. 2 and 3 respectively.
MJKK or MSFJ (as applicable) hereby disclose that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferredstock rated by MJKK or MSFJ (as applicable) have, prior to assignment of any credit rating, agreed to pay to MJKK or MSFJ (as applicable) for credit ratings opinions and servicesrendered by it fees ranging from JPY125,000 to approximately JPY250,000,000.
MJKK and MSFJ also maintain policies and procedures to address Japanese regulatory requirements.
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27 20 July 2020 Inside ASEAN: 20th Edition, July 2020
