Moody's Investors Service says that its Asian Liquidity Stress Index (Asian LSI) worsened in August, after three consecutive months of improvements.
The index, which rises when speculative-grade liquidity appears to decrease, measured 21.1% in August from 20.2% in July.
"The increase in the Asian LSI reflects the addition of one company to our list of firms with lowest or weakest speculative-grade liquidity scores of SGL-4," says Laura Acres, a Moody's Senior Vice President.
"While the index remains below the recent high of 29.1% recorded in October last year, and the record high of 37% reached in the fourth quarter of 2008, amid the global financial crisis, it is still elevated relative to historic levels," adds Acres.
Acres was speaking on the release of Moody's latest "Asian Liquidity Stress Index" report.
Moody's report says the liquidity sub-index for Chinese speculative-grade companies was unchanged in August, at 25.4%, as both the number of rated Chinese high-yield corporates (59) and the number of those with SG-4 scores (15) were unchanged.
China's high-yield property index (26.5%) and the Indonesian sub-index (3.8%) were also flat.
The Australian index improved to 6.3% from 6.7% in July, as the number of high-yield rated Australian companies rose by one to 16, and the number of those with an SGL-4 score was unchanged.
However, Moody's report notes that four speculative-grade companies were downgraded in August, all in the coal and mining sectors.
The report points out that except for the second quarter of this year when the number of upgrades and downgrades was the same, downgrades have outnumbered upgrades since the third quarter of 2011. In addition, data to date shows that the third quarter is tracking to have the highest downgrade to upgrade ratio since the second quarter of 2009.
For August, the percentage of companies with a negative outlook or which were on review for downgrade, rose to the highest level (28.1%) since the fourth quarter of 2012 (34.3%), versus 23.7% in July.
Nonetheless, the vast majority of outlooks for rated Asian speculative-grade companies are stable, although the number declined for a third consecutive month to 70 in August from 74 in July.
Moody's report also points out that no high-yield bond deals were launched in August and none has closed since mid-July.
Nevertheless, while issuance has slowed following a high level of activity early this year, the transactions in Asia so far this year, totaling $17 billion, are higher than the annual totals for each of the three previous years, between 2010 and 2012.
Moody's report is based on the speculative-grade ratings of 114 issuers in Asia (excluding Japan and Australia) and covering $58.4 billion of rated debt in August; an amount which was unchanged from July.