US tapering to hit lending

Asian investors are seeing tighter borrowing conditions and higher rate of defaults among Asian corporates should the United States Federal Reserve starts its tapering in 2014, according to Fitch Ratings said.

“Asian investors anticipate that tapering by the Federal Reserve, should it occur at some stage in 2014, will result in 10-year US treasuries’ yields rising above 3 percent, and wider credit spreads for Asian corporates. This, in turn, is likely to lead to tighter borrowing conditions, and a higher rate of defaults among Asian corporates,” Fitch said.