The COVID surges are dampening domestic demand and consumption in APAC countries, eroding on borrowers' financial reserves.

COVID resurgences pose risks to APAC’s structured finance deals

Deals in India, Australia, Japan, and South Korea are the ones at most risk.

The recent surge of coronavirus cases and reimposition of restrictions in several APAC markets poses asset performance risk for structured finance deals in Australia, India, Japan, and South Korea, warns Moody’s Investors Service.

The COVID surges are dampening domestic demand and consumption in APAC countries, eroding on borrowers' financial reserves.

“Performance risks are notedly highest in India, where the overall number of coronavirus cases far outstrips cases in other APAC countries,” said Marie Lam, associate managing director at Moody’’s. “Asset performance risks for structured finance deals are therefore higher in India than in other Asia-Pacific countries.”

Performance risks are lower for Australia, Japan, and Korea. For the first three countries, if surging coronavirus cases and restrictions push up unemployment, structured finance deals' asset performance will deteriorate. However, ongoing fiscal stimulus will support employment in these countries, keeping risks low, Lam said.

Employees and workplaces are also now more used to COVID restrictions in these markets, which could curb job market disruptions. 

In China, whilst sporadic coronavirus cases have occurred in some cities over recent months, it hasn’t been to the level of resurgence seen in other countries. Asset performance risks are then “remote”, Lam said.

Government and lender support will also help mitigate asset performance risks for structured finance deals. APAC governments have notedly introduced various schemes to support individuals and businesses. 

For their part, lenders are supporting borrowers by deferring loan payments or modifying loan conditions.

Follow the links for more news on

Join Asian Banking & Finance community
Since you're here...

...there are many ways you can work with us to advertise your company and connect to your customers. Our team can help you dight and create an advertising campaign, in print and digital, on this website and in print magazine.

We can also organize a real life or digital event for you and find thought leader speakers as well as industry leaders, who could be your potential partners, to join the event. We also run some awards programmes which give you an opportunity to be recognized for your achievements during the year and you can join this as a participant or a sponsor.

Let us help you drive your business forward with a good partnership!


ZA Bank’s Devon Sin on why Web3 is key to HK’s growth
The bank has expanded services to cater to stablecoin issuers and Web3 companies. 
Retail Banking
CIMB Niaga leads the way in captivating Indonesia’s youth
The bank’s digital solutions are winning over younger generations with 3.2M mobile users and 96% digital transaction rate in 2023.