It is clear from the past few weeks that COVID-19 continues to disrupt global supply chains in unprecedented ways. The impact on supply chains has been widespread with autos, electronics, capital goods, commodities and apparel firms all facing headwinds from reduced availability of parts. A review of over 6,000 company conference calls from January 20 to March 4, 2020 shows 42.3% of firms mentioned coronavirus.
The imminent impact of these supply chain bottlenecks on the credit standing of corporates is already visible in Asia Pacific with S&P Global Ratings taking 47 ratings actions related to COVID-19 as of March 26, 2020 as it expects borrowers and issuers with weaker credit profiles to find conditions increasingly difficult, even with monetary easing.
For corporates in Asia-Pacific, identifying these supply chain risks may be less evident given that most counterparties tend to be unrated. It is therefore useful to have access to analytical models that not only broadly align with credit ratings, but also have the ability to provide early warning signals of credit deterioration. S&P Global Market Intelligence can help support your enterprise risk management with our Credit Analytics models by:
- Estimating credit scores and identifying factors of weakness for your customers and suppliers
- Overlaying this with qualitative factors such as diversification and payment track record
- Benchmarking the performance of these counterparties with their peers
- Providing an aggregated view on the credit health of regions or industries of exposure
“Long Road to Recovery: Coronavirus Lessons from Supply Chain and Financial Data.” S&P Global Market Intelligence, Panjiva, 25 Mar. 2020, www.spglobal.com/marketintelligence/en/news-insights/research/long-road-to-recovery-coronavirus-lessons-from-supply-chain-and-financial-data.
 “Credit Conditions Asia-Pacific: As Bad As 1997.” S&P Global Ratings, 30 Mar. 2020, https://www.capitaliq.com/CIQDotNet/CreditResearch/SPResearch.aspx?DocumentId=44417081&From=SNP_CRS.
S&P Global Ratings does not contribute to or participate in the creation of credit scores generated by S&P Global Market Intelligence. Lowercase nomenclature is used to differentiate S&P Global Market Intelligence PD credit model scores from the credit ratings issued by S&P Global Ratings.
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