Moody's Investors Service says that its Asian Liquidity Stress Index (LSI) showed a slight improvement in November with 9.0% of the rated speculative-grade portfolio demonstrating inadequate liquidity against 9.6% in October.

"The change in the index -- which declines when corporate liquidity increases -- was due to the withdrawal of four ratings, of which two were in the SGL-4 category, rather than any fundamental improvement in overall liquidity," says LauraAcres, a Moody's Vice President and Senior
Credit Officer.

SGL-4 is the lowest speculative-grade liquidity score an individual company can receive.

"The peak of the credit cycle has passed, and the overall credit quality of the high-yield portfolio is on the wane as evidenced by the number of downgrades versus upgrades," says Acres.

"For the Asian LSI, this situation is likely to result in stability and then a gradual deterioration, as companies become pressured to raise money to address upcoming debt maturities."

"Issuers are looking to domestic and regional banking markets to refinance maturing facilities and raise funds for capital expenditure."

The total amount of rated debt outstanding in November rose slightly to US$49.2 billion, versus US$48.8 billion in October, fuelled by PT Perusahaan Listrik Negara's US$1 billion drawing off its MTN program.