Tightening of Short-term Business Loans in China Worries Some Analysts

The rate of short-term, non-financial corporate bank loans to companies in China has fallen in recent months to less than 1% from a high of 4.8% growth in January 2016.  The tightening—a result of Chinese policymakers’ shift to reduce debt in sectors with excess capacity like iron and coal production—is helping improve China’s overall creditworthiness, notes a recent report in ... Read More »

Credit Management Index (CMI) Could Begin Summer with Firm Rebound

The numbers in NACM’s June Credit Managers’ Index (CMI), which will be released Friday at nacm.org, are likely to reflect a strong monthly rebound in business conditions. The index has been on a roller-coaster ride over prior months, mirroring the volatility in many kinds of economic data streams. “The fact is that there are contradictory waves coursing through the economy as ... Read More »

China Sees Rise of Fintech E-payment Tech Firms

The rise of electronic payments providers in China is facilitating more online consumption and “omni-channel retailing” and may serve as a source of competition to traditional retailers and banking operations going forward. “The rise in the usage of e-payments is positive for internet companies and most service and consumer-related companies, although it could also be negative for some companies in ... Read More »

US Risk Climate: Small Business Owners Remain Optimistic

A surge in small business optimism that started last November was continued in March, according to the National Federation of Independent Business’ (NFIB) Small Business Optimism Index. Though the index slipped slightly, it still posted a strong reading, with gains in actual earnings, capital expenditure plans and job-creation plans. Sales expectations, however, dropped eight points, signaling that the index could ... Read More »

Moody’s Database Reveals Insights into Corporate Debt Structure

Analysis of data from a database of debt instruments from Moody’s Investors Service may yield helpful insights ahead of the next economic downturn. The data reveals how default types change over time, how recoveries differ depending on the instrument’s position in a company’s debt structure and whether private-equity ownership influences recovery rates. Moody’s Ultimate Recovery Database traces close to 5,500 ... Read More »

USA Risk Climate: Optimism among Small Business Owners Highest in over a Decade

Notwithstanding the concern expressed by the G20 and B20 Forums about the general lack of prosperity of SMEs, the news from the United States is encouraging as reported by the National Association of Credit Management (NACM). Expectations for better business conditions among small business owners are at their highest since 2004, according to the National Federation of Independent Businesses’ (NFIB) ... Read More »

Credit Managers’ Index Ended Year 2016 on an Upbeat Note

The reading for the combined CMI jumped up from 52.9 to 54.1, the third-highest reading seen this year. In April, it  hit 54.6 and in March it  was at 54.3. Last month’s 52.9 was the fourth-lowest reading in the last 12 months.  The news was similarly positive in both the favorable and unfavorable index readings. The favorable score last month ... Read More »

Country Risk Climate: A Look at China’s Yuan

Default risks among companies in the People’s Republic of China are rising as the regime struggles to keep the yuan’s exchange market slide gradual. The authorities have taken a number of steps to slow the unit’s depreciation. They have issued new rules clamping down on overseas investments by Chinese companies. They have instructed banks to limit sharply how much companies, ... Read More »

Global Risk Climate: Battery Technology Possible Disruptor to Credit

Advancements in battery technology could have significant implications for global credit markets, according to Fitch Ratings. Disruption may occur across sectors that account for close to a quarter of all outstanding corporate bonds.  A leap in battery technology could increase the viability of electric vehicles (EVs) over internal combustion engines, resulting in a negative effect on credit in the oil ... Read More »

USA Risk Climate: Credit Managers’ Index for August Looking Grim

Credit and financial professionals should not expect any sort of robust recovery in NACM’s Credit Managers’ Index (CMI) for August, which will be released Wednesday morning. Although likely to stay within the range of expansion (anything above 50) for months to come, the combined index appears hard-pressed to reverse its recent sluggishness.  Professionals will want to pay close attention to ... Read More »

Country Risk Climates: Credit Risks in Middle East and Africa

Most credit professionals who weighed in on how they do business in the Middle East and Africa, using FCIB’s latest survey, conduct business with existing customers in these countries.  Wire transfer, letters of credit (L/C) and cash against documents were some of the more popular ways they secure payments. Survey takers who sell into Pakistan contributed payment delays to billing ... Read More »

UK Risk Climate: BREXIT Impact on Insolvencies

How will the Brexit impact insolvencies?  A number of sources have attempted to answer this question. The U.K.’s exit from the EU will have a major impact on corporate insolvency in the sovereign state, according to Andrew Tate, president of U.K. insolvency trade body R3. “The U.K.’s insolvency regime does not exist in a vacuum,” Tate said. “It is entwined ... Read More »

Heard at the NACM Credit Congress: More Businesses Interested in Electronic Payments

The business-to-business (B2B) payment landscape is still rife with inefficiencies and not enough straight-through processing (completely electronic B2B payments), according to a speaker at NACM’s 120th Credit Congress in Las Vegas last week. Meanwhile, businesses often don’t receive enough remittance information and handle too many paper checks. These payment issues are among those addressed by Claudia Swendseid, senior vice president ... Read More »

USA Country Risk Climate: Overdue Commercial and Industrial Loan Balances Register Sharp Increase

The FDIC’s first-quarter Quarterly Banking Profile report shows an uptick in delinquent commercial and industry (C&I) loans. (The report provides a comprehensive summary of the financial results for all FDIC-insured institutions.)  Noncurrent loans of 90 days or more past due in the C&I sector rose $3.3 billion (2.4%) during the first three months of the year, according to FDIC data. ... Read More »

New Chinese Corporate Default Trend Underscores Increasing Risk

Nicholas Stern, editorial associate of the National Association of Credit Management (NACM) wrote recently: Defaults by Chinese state-owned enterprises (SOEs) are on the rise as Chinese authorities exert less control than a decade ago over the nation’s financial system. This could bring default rates in line with those reported in developed economies, increasing credit risks of China-based companies.  China’s financial ... Read More »

NACM’s 120th Credit Congress & Expo

June 12 – 15, 2016  Caesars Palace Las Vegas In June 2016, NACM will be hosting the 120th Credit Congress & Expo at Caesars Palace Las Vegas. Come be a part of this grand tradition of education, professional development and camaraderie among business credit professionals from around the world. Attending NACM’s Credit Congress is an incredible value and a priceless ... Read More »

China Risk Climate: Corporate Payments Continued Downward Trend in 2015

Corporate payments among China-based firms continued to worsen in 2015, and Chinese companies decreased average credit terms, sparking a warning that firms with overcapacity and low profits have a higher likelihood of default. Some 80% of 1,000 China-based companies surveyed by Coface said they experienced late payments in 2015, up slightly from 79.8% in 2014, the firm outlined in a report released ... Read More »