Moody's on Thursday said that most rated Asian infrastructure firms companies can manage refinancing risk of bond maturities through 2022.
Most of these companies get benefit from government support or operate in sectors less affected by the coronavirus outbreak, the Moody's Investors Service said in a report.
"Most rated Asian project and infrastructure companies are well-positioned to manage their refinancing needs through 2022, with upcoming maturities concentrated at investment-grade companies and many operating in industries less exposed to coronavirus disruptions," it said.
Companies in the power and gas utilities sectors account for around 70 percent of maturities through 2022, and typically benefit from cash flow predictability and manageable exposure to coronavirus-related disruptions, reducing refinancing risk within the portfolio.
The infrastructure sector has remained attractive to institutional investors despite the uncertain funding environment, underpinned by companies' ownership of long-term essential assets, such as power and gas utilities, said Ralph Ng, a Moody's Assistant Vice President and Analyst.
Frequently Asked Questions
A vaccine works by mimicking a natural infection. A vaccine not only induces immune response to protect people from any future COVID-19 infection, but also helps quickly build herd immunity to put an end to the pandemic. Herd immunity occurs when a sufficient percentage of a population becomes immune to a disease, making the spread of disease from person to person unlikely. The good news is that SARS-CoV-2 virus has been fairly stable, which increases the viability of a vaccine.
There are broadly four types of vaccine — one, a vaccine based on the whole virus (this could be either inactivated, or an attenuated [weakened] virus vaccine); two, a non-replicating viral vector vaccine that uses a benign virus as vector that carries the antigen of SARS-CoV; three, nucleic-acid vaccines that have genetic material like DNA and RNA of antigens like spike protein given to a person, helping human cells decode genetic material and produce the vaccine; and four, protein subunit vaccine wherein the recombinant proteins of SARS-COV-2 along with an adjuvant (booster) is given as a vaccine.
Vaccine development is a long, complex process. Unlike drugs that are given to people with a diseased, vaccines are given to healthy people and also vulnerable sections such as children, pregnant women and the elderly. So rigorous tests are compulsory. History says that the fastest time it took to develop a vaccine is five years, but it usually takes double or sometimes triple that time.
“The airport and toll road sectors have been very much affected by the coronavirus outbreak, but most remain investment-grade which mitigates refinancing risk,” said Ng.
Bonds outstanding from these two sectors account for just 10 percent of infrastructure-related maturities in Asia through 2022.
"Across the region, Chinese companies account for 59 percent of total Asian infrastructure-related outstanding bonds and 73 percent of upcoming maturities through 2022, followed by Korean companies at 25 percent of total outstanding bonds," the report said.
The remaining maturities are spread across Southeast Asia, with project bonds becoming a more popular funding option for infrastructure companies in the region.Follow our full coverage of the coronavirus pandemic here.