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Moody's - Wealthier countries and China lead green recovery spending in APAC; differing emphasis will drive credit divergence

·24 min read

<!DOCTYPE html> <html lang="" xml:lang=""> <head> <title>/nwsys/www/images/PBC_1260339</title> <meta http-equiv="Content-Type" content="text/html; charset=UTF-8"/> <meta name="generator" content="pdftohtml 0.36"/> <meta name="date" content="2021-01-12T20:35:27+00:00"/> <style type="text/css"> <!-- .xflip { -moz-transform: scaleX(-1); -webkit-transform: scaleX(-1); -o-transform: scaleX(-1); transform: scaleX(-1); filter: fliph; } .yflip { -moz-transform: scaleY(-1); -webkit-transform: scaleY(-1); -o-transform: scaleY(-1); transform: scaleY(-1); filter: flipv; } .xyflip { -moz-transform: scaleX(-1) scaleY(-1); -webkit-transform: scaleX(-1) scaleY(-1); -o-transform: scaleX(-1) scaleY(-1); transform: scaleX(-1) scaleY(-1); filter: fliph + flipv; } --> </style> </head> <body bgcolor="#A0A0A0" vlink="blue" link="blue"> <!-- Page 1 --> <style type="text/css"> <!-- p {margin: 0; padding: 0;} .ft00{font-size:18px;font-family:Times;color:#000000;} .ft01{font-size:18px;font-family:Times;color:#1257c7;} .ft02{font-size:13px;font-family:Times;color:#0d0c0c;} .ft03{font-size:13px;font-family:Times;color:#000000;} .ft04{font-size:13px;font-family:Times;color:#1b62b7;} .ft05{font-size:13px;line-height:30px;font-family:Times;color:#0d0c0c;} --> </style> <div id="page1-div" style="position:relative;width:918px;height:1188px;"> <img width="918" height="1188" src="http://mco.acquiremedia.com/images/PBC_1260339001.png" alt="background image"/> <p style="position:absolute;top:155px;left:108px;white-space:nowrap" class="ft00"><b>Research Announcement:&#160;</b></p> <p style="position:absolute;top:155px;left:364px;white-space:nowrap" class="ft01"><b>Moody's - Wealthier countries and China lead</b></p> <p style="position:absolute;top:180px;left:108px;white-space:nowrap" class="ft01"><b>green recovery spending in APAC; differing emphasis will drive credit</b></p> <p style="position:absolute;top:204px;left:108px;white-space:nowrap" class="ft01"><b>divergence</b></p> <p style="position:absolute;top:268px;left:108px;white-space:nowrap" class="ft02">Singapore, January 13, 2021 --</p> <p style="position:absolute;top:299px;left:108px;white-space:nowrap" class="ft03">»&#160;Wealthier countries and China have done most to embed environmental objectives into their</p> <p style="position:absolute;top:318px;left:127px;white-space:nowrap" class="ft03">recovery packages</p> <p style="position:absolute;top:348px;left:108px;white-space:nowrap" class="ft03">»&#160;Relief packages’ varying environmental focus will drive credit divergence for sovereigns and</p> <p style="position:absolute;top:368px;left:127px;white-space:nowrap" class="ft03">infrastructure issuers</p> <p style="position:absolute;top:404px;left:108px;white-space:nowrap" class="ft02">Globally, many governments have seized the opportunity provided by the pandemic to embed</p> <p style="position:absolute;top:423px;left:108px;white-space:nowrap" class="ft02">environmental objectives into their recovery packages, including investments in resilience to</p> <p style="position:absolute;top:443px;left:108px;white-space:nowrap" class="ft02">environmental risks or reductions in carbon intensity. In APAC, the size and scope of green recovery</p> <p style="position:absolute;top:462px;left:108px;white-space:nowrap" class="ft02">packages vary significantly, driving credit divergence across countries and sectors, according to a</p> <p style="position:absolute;top:482px;left:108px;white-space:nowrap" class="ft05">new report from Moody’s Investors Service.<br/>“Although the European green recovery is larger and broader in scope than APAC’s initiatives, green</p> <p style="position:absolute;top:531px;left:108px;white-space:nowrap" class="ft02">stimulus measures in the region have been large by historical standards, with the largest spending</p> <p style="position:absolute;top:551px;left:108px;white-space:nowrap" class="ft02">in wealthier countries and stronger emerging markets, notably China, Japan, Korea, Malaysia, New</p> <p style="position:absolute;top:570px;left:108px;white-space:nowrap" class="ft05">Zealand and Singapore,” says Nishad Majmudar, a Moody’s Assistant Vice President and Analyst.<br/>Most of these plans target specific projects such as green buildings, infrastructure, electric vehicles</p> <p style="position:absolute;top:620px;left:108px;white-space:nowrap" class="ft02">and protection of biodiversity. For example, Japan’s measures include ¥2 trillion in funding for</p> <p style="position:absolute;top:640px;left:108px;white-space:nowrap" class="ft02">companies developing green technologies, while Korea launched a five-year $39 billion Green New</p> <p style="position:absolute;top:659px;left:108px;white-space:nowrap" class="ft02">Deal focused on improving energy efficiency in public buildings and expanding the country’s fleet of</p> <p style="position:absolute;top:679px;left:108px;white-space:nowrap" class="ft05">electric and hydrogen-powered vehicles.<br/>That said, stimulus packages in APAC also reinforce carbon-intensive activity, such as fiscal</p> <p style="position:absolute;top:729px;left:108px;white-space:nowrap" class="ft02">support for airlines and subsidies for power and fuel, reflecting the importance of these sectors to</p> <p style="position:absolute;top:748px;left:108px;white-space:nowrap" class="ft02">employment and the wider economy. Although this trend is not unique to APAC, it suggests mixed</p> <p style="position:absolute;top:768px;left:108px;white-space:nowrap" class="ft05">prospects for a full embrace of environmental considerations by governments.<br/>Pandemic-related fiscal stimulus that invests in environmental projects can have positive long-term</p> <p style="position:absolute;top:817px;left:108px;white-space:nowrap" class="ft02">credit advantages for public and private-sector debt issuers in the infrastructure, construction and</p> <p style="position:absolute;top:837px;left:108px;white-space:nowrap" class="ft02">auto sectors. The credit benefits can include a reduction in pollution-related health costs, increased</p> <p style="position:absolute;top:856px;left:108px;white-space:nowrap" class="ft05">resilience to physical climate risk and lower costs of renewable energy.<br/>Moreover, differing approaches to green stimulus measures may amplify APAC sovereigns’ divergent</p> <p style="position:absolute;top:906px;left:108px;white-space:nowrap" class="ft02">credit quality, as wealthier sovereigns are better able absorb the discretionary costs of green</p> <p style="position:absolute;top:926px;left:108px;white-space:nowrap" class="ft02">stimulus programs and at a lower cost of borrowing. Sector-wise, green stimulus will be a positive</p> <p style="position:absolute;top:945px;left:108px;white-space:nowrap" class="ft02">credit driver for utilities, construction companies and battery manufacturers, while creating credit</p> <p style="position:absolute;top:965px;left:108px;white-space:nowrap" class="ft05">challenges for oil refiners and operators of captive coal power plants.<br/>Subscribers can access the report “ESG – Asia-Pacific: COVID-19 green recovery</p> <p style="position:absolute;top:1014px;left:108px;white-space:nowrap" class="ft02">spending varies across the region, driving credit divergence” at:&#160;</p> <p style="position:absolute;top:1014px;left:554px;white-space:nowrap" class="ft04">http://www.moodys.com/</p> <p style="position:absolute;top:1034px;left:108px;white-space:nowrap" class="ft04">researchdocumentcontentpage.aspx?docid=PBC_1246295</p> </div> <!-- Page 2 --> <style type="text/css"> <!-- p {margin: 0; padding: 0;} .ft06{font-size:13px;font-family:Times;color:#0d0c0c;} .ft07{font-size:13px;line-height:22px;font-family:Times;color:#0d0c0c;} --> </style> <div id="page2-div" style="position:relative;width:918px;height:1188px;"> <img width="918" height="1188" src="http://mco.acquiremedia.com/images/PBC_1260339002.png" alt="background image"/> <p style="position:absolute;top:114px;left:108px;white-space:nowrap" class="ft02">NOTE TO JOURNALISTS ONLY: For more information, please call one of our global</p> <p style="position:absolute;top:133px;left:108px;white-space:nowrap" class="ft02">press information hotlines: New York <PhoneNo>+1-212-553-0376</PhoneNo>, London <PhoneNo>+44-20-7772-5456</PhoneNo>, Tokyo</p> <p style="position:absolute;top:153px;left:108px;white-space:nowrap" class="ft02"><PhoneNo>+813-5408-4110</PhoneNo>, Hong Kong <PhoneNo>+852-3758-1350</PhoneNo>, Sydney <PhoneNo>+61-2-9270-8141</PhoneNo>, Mexico City</p> <p style="position:absolute;top:172px;left:108px;white-space:nowrap" class="ft02"><PhoneNo>001-888-779-5833</PhoneNo>, São Paulo <PhoneNo>0800-891-2518</PhoneNo>, or Buenos Aires <PhoneNo>0800-666-3506</PhoneNo>. You can also email</p> <p style="position:absolute;top:192px;left:108px;white-space:nowrap" class="ft05">us at mediarelations@moodys.com or visit our web site at www.moodys.com.<br/>This publication does not announce a credit rating action. For any credit ratings referenced in this</p> <p style="position:absolute;top:241px;left:108px;white-space:nowrap" class="ft02">publication, please see the ratings tab on the issuer/entity page on&#160;</p> <p style="position:absolute;top:241px;left:574px;white-space:nowrap" class="ft04">www.moodys.com</p> <p style="position:absolute;top:241px;left:701px;white-space:nowrap" class="ft02">&#160;for the most</p> <p style="position:absolute;top:261px;left:108px;white-space:nowrap" class="ft05">updated credit rating action information and rating history.<br/>Nishad Majmudar</p> <p style="position:absolute;top:311px;left:108px;white-space:nowrap" class="ft02">AVP-Analyst</p> <p style="position:absolute;top:330px;left:108px;white-space:nowrap" class="ft02">SOV/SUB-SOV</p> <p style="position:absolute;top:350px;left:108px;white-space:nowrap" class="ft02">Moody's Investors Service Singapore Pte. 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However, MOODY’S is not an auditor and cannot</p> <p style="position:absolute;top:830px;left:108px;white-space:nowrap" class="ft02">in every instance independently verify or validate information received in the rating process or in</p> <p style="position:absolute;top:849px;left:108px;white-space:nowrap" class="ft09">preparing its Publications.<br/>To the extent permitted by law, MOODY’S and its directors, officers, employees, agents,</p> <p style="position:absolute;top:892px;left:108px;white-space:nowrap" class="ft02">representatives, licensors and suppliers disclaim liability to any person or entity for any indirect,</p> <p style="position:absolute;top:911px;left:108px;white-space:nowrap" class="ft02">special, consequential, or incidental losses or damages whatsoever arising from or in connection</p> <p style="position:absolute;top:931px;left:108px;white-space:nowrap" class="ft02">with the information contained herein or the use of or inability to use any such information, even if</p> <p style="position:absolute;top:950px;left:108px;white-space:nowrap" class="ft02">MOODY’S or any of its directors, officers, employees, agents, representatives, licensors or suppliers</p> <p style="position:absolute;top:970px;left:108px;white-space:nowrap" class="ft02">is advised in advance of the possibility of such losses or damages, including but not limited to:</p> <p style="position:absolute;top:989px;left:108px;white-space:nowrap" class="ft02">(a) any loss of present or prospective profits or (b) any loss or damage arising where the relevant</p> <p style="position:absolute;top:1009px;left:108px;white-space:nowrap" class="ft02">financial instrument is not the subject of a particular credit rating assigned by MOODY’S.</p> </div> <!-- Page 4 --> <style type="text/css"> <!-- p {margin: 0; padding: 0;}--> </style> <div id="page4-div" style="position:relative;width:918px;height:1188px;"> <img width="918" height="1188" src="http://mco.acquiremedia.com/images/PBC_1260339004.png" alt="background image"/> <p style="position:absolute;top:114px;left:108px;white-space:nowrap" class="ft02">To the extent permitted by law, MOODY’S and its directors, officers, employees, agents,</p> <p style="position:absolute;top:133px;left:108px;white-space:nowrap" class="ft02">representatives, licensors and suppliers disclaim liability for any direct or compensatory losses</p> <p style="position:absolute;top:153px;left:108px;white-space:nowrap" class="ft02">or damages caused to any person or entity, including but not limited to by any negligence (but</p> <p style="position:absolute;top:172px;left:108px;white-space:nowrap" class="ft02">excluding fraud, willful misconduct or any other type of liability that, for the avoidance of doubt,</p> <p style="position:absolute;top:192px;left:108px;white-space:nowrap" class="ft02">by law cannot be excluded) on the part of, or any contingency within or beyond the control of,</p> <p style="position:absolute;top:211px;left:108px;white-space:nowrap" class="ft02">MOODY’S or any of its directors, officers, employees, agents, representatives, licensors or suppliers,</p> <p style="position:absolute;top:231px;left:108px;white-space:nowrap" class="ft02">arising from or in connection with the information contained herein or the use of or inability to use</p> <p style="position:absolute;top:250px;left:108px;white-space:nowrap" class="ft09">any such information.<br/>NO WARRANTY, EXPRESS OR IMPLIED, AS TO THE ACCURACY, TIMELINESS,</p> <p style="position:absolute;top:293px;left:108px;white-space:nowrap" class="ft02">COMPLETENESS, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF</p> <p style="position:absolute;top:312px;left:108px;white-space:nowrap" class="ft02">ANY CREDIT RATING, ASSESSMENT, OTHER OPINION OR INFORMATION IS GIVEN OR MADE</p> <p style="position:absolute;top:332px;left:108px;white-space:nowrap" class="ft09">BY MOODY’S IN ANY FORM OR MANNER WHATSOEVER.<br/>Moody’s Investors Service, Inc., a wholly-owned credit rating agency subsidiary of Moody’s</p> <p style="position:absolute;top:374px;left:108px;white-space:nowrap" class="ft02">Corporation (“MCO”), hereby discloses that most issuers of debt securities (including corporate and</p> <p style="position:absolute;top:394px;left:108px;white-space:nowrap" class="ft02">municipal bonds, debentures, notes and commercial paper) and preferred stock rated by Moody’s</p> <p style="position:absolute;top:413px;left:108px;white-space:nowrap" class="ft02">Investors Service, Inc. have, prior to assignment of any credit rating, agreed to pay to Moody’s</p> <p style="position:absolute;top:433px;left:108px;white-space:nowrap" class="ft02">Investors Service, Inc. for credit ratings opinions and services rendered by it fees ranging from</p> <p style="position:absolute;top:452px;left:108px;white-space:nowrap" class="ft02">$1,000 to approximately $5,000,000. MCO and Moody’s Investors Service also maintain policies</p> <p style="position:absolute;top:472px;left:108px;white-space:nowrap" class="ft02">and procedures to address the independence of Moody’s Investors Service credit ratings and credit</p> <p style="position:absolute;top:491px;left:108px;white-space:nowrap" class="ft02">rating processes. Information regarding certain affiliations that may exist between directors of MCO</p> <p style="position:absolute;top:511px;left:108px;white-space:nowrap" class="ft02">and rated entities, and between entities who hold credit ratings from Moody’s Investors Service and</p> <p style="position:absolute;top:530px;left:108px;white-space:nowrap" class="ft02">have also publicly reported to the SEC an ownership interest in MCO of more than 5%, is posted</p> <p style="position:absolute;top:550px;left:108px;white-space:nowrap" class="ft02">annually at&#160;</p> <p style="position:absolute;top:550px;left:188px;white-space:nowrap" class="ft04">www.moodys.com</p> <p style="position:absolute;top:550px;left:315px;white-space:nowrap" class="ft02">&#160;under the heading “Investor Relations — Corporate Governance —</p> <p style="position:absolute;top:569px;left:108px;white-space:nowrap" class="ft09">Director and Shareholder Affiliation Policy.”<br/>Additional terms for Australia only: Any publication into Australia of this document is pursuant to the</p> <p style="position:absolute;top:612px;left:108px;white-space:nowrap" class="ft02">Australian Financial Services License of MOODY’S affiliate, Moody’s Investors Service Pty Limited</p> <p style="position:absolute;top:631px;left:108px;white-space:nowrap" class="ft02">ABN 61 003 399 657AFSL 336969 and/or Moody’s Analytics Australia Pty Ltd ABN 94 105 136</p> <p style="position:absolute;top:651px;left:108px;white-space:nowrap" class="ft02">972 AFSL 383569 (as applicable). This document is intended to be provided only to “wholesale</p> <p style="position:absolute;top:670px;left:108px;white-space:nowrap" class="ft02">clients” within the meaning of section 761G of the Corporations Act 2001. By continuing to access</p> <p style="position:absolute;top:690px;left:108px;white-space:nowrap" class="ft02">this document from within Australia, you represent to MOODY’S that you are, or are accessing</p> <p style="position:absolute;top:709px;left:108px;white-space:nowrap" class="ft02">the document as a representative of, a “wholesale client” and that neither you nor the entity you</p> <p style="position:absolute;top:729px;left:108px;white-space:nowrap" class="ft02">represent will directly or indirectly disseminate this document or its contents to “retail clients” within</p> <p style="position:absolute;top:748px;left:108px;white-space:nowrap" class="ft02">the meaning of section 761G of the Corporations Act 2001. MOODY’S credit rating is an opinion as</p> <p style="position:absolute;top:768px;left:108px;white-space:nowrap" class="ft02">to the creditworthiness of a debt obligation of the issuer, not on the equity securities of the issuer or</p> <p style="position:absolute;top:787px;left:108px;white-space:nowrap" class="ft09">any form of security that is available to retail investors.<br/>Additional terms for Japan only: Moody's Japan K.K. (“MJKK”) is a wholly-owned credit rating agency</p> <p style="position:absolute;top:830px;left:108px;white-space:nowrap" class="ft02">subsidiary of Moody's Group Japan G.K., which is wholly-owned by Moody’s Overseas Holdings Inc.,</p> <p style="position:absolute;top:849px;left:108px;white-space:nowrap" class="ft02">a wholly-owned subsidiary of MCO. Moody’s SF Japan K.K. (“MSFJ”) is a wholly-owned credit rating</p> <p style="position:absolute;top:869px;left:108px;white-space:nowrap" class="ft02">agency subsidiary of MJKK. MSFJ is not a Nationally Recognized Statistical Rating Organization</p> <p style="position:absolute;top:888px;left:108px;white-space:nowrap" class="ft02">(“NRSRO”). Therefore, credit ratings assigned by MSFJ are Non-NRSRO Credit Ratings. Non-</p> <p style="position:absolute;top:908px;left:108px;white-space:nowrap" class="ft02">NRSRO Credit Ratings are assigned by an entity that is not a NRSRO and, consequently, the rated</p> <p style="position:absolute;top:927px;left:108px;white-space:nowrap" class="ft02">obligation will not qualify for certain types of treatment under U.S. laws. MJKK and MSFJ are credit</p> <p style="position:absolute;top:947px;left:108px;white-space:nowrap" class="ft02">rating agencies registered with the Japan Financial Services Agency and their registration numbers</p> <p style="position:absolute;top:966px;left:108px;white-space:nowrap" class="ft09">are FSA Commissioner (Ratings) No. 2 and 3 respectively.<br/>MJKK or MSFJ (as applicable) hereby disclose that most issuers of debt securities (including</p> <p style="position:absolute;top:1009px;left:108px;white-space:nowrap" class="ft02">corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated</p> <p style="position:absolute;top:1028px;left:108px;white-space:nowrap" class="ft02">by MJKK or MSFJ (as applicable) have, prior to assignment of any credit rating, agreed to pay to</p> </div> <!-- Page 5 --> <style type="text/css"> <!-- p {margin: 0; padding: 0;}--> </style> <div id="page5-div" style="position:relative;width:918px;height:1188px;"> <img width="918" height="1188" src="http://mco.acquiremedia.com/images/PBC_1260339005.png" alt="background image"/> <p style="position:absolute;top:114px;left:108px;white-space:nowrap" class="ft02">MJKK or MSFJ (as applicable) for credit ratings opinions and services rendered by it fees ranging</p> <p style="position:absolute;top:133px;left:108px;white-space:nowrap" class="ft09">from JPY125,000 to approximately JPY550,000,000.<br/>MJKK and MSFJ also maintain policies and procedures to address Japanese regulatory</p> <p style="position:absolute;top:176px;left:108px;white-space:nowrap" class="ft02">requirements.</p> </div> </body> </html>