The funding environment in the Asia-Pacific region has worsened noticeably in recent weeks as the global credit crisis continues to unfold.

In a report, "Tight Credit Creates Challenges For Corporate Refinancing Needs In Asia-Pacific," published today, Diane Vazza head of Standard & Poor's Global Fixed Income Research Group, said, "We estimate that a cumulative total of $368 billion of corporate debt rated by Standard & Poor's--including nonfinancials and financials--will mature or come due for refunding beginning in the fourth quarter of 2008 and ending in 2011 in Asia.

By contrast, $2.1 trillion is expected to mature across all rating categories in Europe, and $700 billion is due within the US speculative-grade segment alone, Vaza added.

Maturities are disproportionately concentrated, with two countries (Japan and Australia) accounting for 94 per cent of total rated corporate bond maturities coming due in the three years ending in 2011 the article said. 

Notwithstanding low-rated corporate debt exposure, we note that refinancing risk remains an overall growing concern for the region.

"Banks are much more cautious about lending, causing credit growth to decelerate substantially relative to the past couple of years," said Vazza adding, "This pullback is perhaps keenest among global banks, though domestic banks in the region are not immune and are more likely to preserve relationships with the strongest credits."

"For issuers with weaker fundamentals, available financing options have shrunken considerably at a time when business is softening and financial strain is spreading," said  Vazza.