(TIS) - The following is an Asian Liquidity Stress Index report from Moody's Investors Service.

Moody's: Asian Liquidity Stress Index falls in July

Hong Kong, August 06, 2013 -- Moody's Investors Service says that its Asian Liquidity Stress Index (Asian LSI) declined for a third consecutive month to 20.2% in July from 23.9% in June.

The index, which decreases when speculative-grade liquidity appears to increase, is at its lowest level since July 2012, when it was 16.8% but remains historically high.

"The LSI has decreased gradually from its recent high of 29.1% in October 2012. The July decline resulted from a net decrease in the number of companies with our lowest (weakest) speculative-grade liquidity score (SGL-4)," says Laura Acres, a Moody's Senior Vice President.

"The total number of rated high-yield companies also increased by one to 114, which further contributed to the overall improvements in this month's Asian LSI."

Acres was speaking on the release of Moody's latest "Asian Liquidity Stress Index" report.

The liquidity sub-index for Chinese speculative-grade companies fell to 25.4% from 28.8% in June as the number of Chinese companies with an SGL-4 score decreased by two.

The number of rated Chinese high-yield corporates was unchanged at 59. China's high-yield property index also decreased, to 26.5% from 29.4% in June, as one company left the roster of those with an SGL-4 score.

The Indonesian sub-index, which was 8.0% in May and June, plunged to 3.8% in July. The decrease reflected the departure of one company from the list of those with an SGL-4 score.

Meanwhile, the Australian reading was unchanged from June at 6.7%.

High-yield rated bond issuance slowed further following the strong start early this year. However, issuance so far this year ($17 billion) is still higher than the annual totals for each of the previous three years.

Looking ahead, the high-yield default rate for Asia Pacific (ex-Japan) corporates will stay at a low 2% in 2013, according to Moody's Credit Transition Model. The rate trended downward during the first half of the year and will rise mildly in the second half. The 2% translates into one or two potential defaults.

Subscribers can access the report at https://www.moodys.com/research/Moodys-Asian-Liquidity-Stress-Index-August-2013--PBC_157123.