Southeast Asia Capital Confidence Barometer April – October 2013

Access to capital

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Optimism in access to funding

Even with relative ease of access to debt, a majority of Southeast Asia respondents expect to maintain a low dependency on debt. This is a clear reflection of the confidence that Southeast Asia respondents have in the stability of their corporate earnings as well as the strength of their balance sheets.

83%   of SEA respondents believe that credit availability will improve or at least remain stable.

What is your company's current debt to capital ratio?

50%   of SEA respondents expect their debt to capital ratios to remain unchanged for the next 12 months.

When asked about their focus if they had excess cash over the next 12 months, 27% of Southeast Asia respondents said that they will use it to pay down their debt, compared with just 17% who felt the same six months ago.

Deal financing will not be dependent on debt

Despite relative ease of access to credit, taking advantage of the cash build up on balance sheets and ease of access to capital, more than half of global and Southeast Asia respondents expect to use cash as a primary source of deal financing over the next 12 months. There is a sharp decline in dependency on debt for deal financing.

Refinancing activities are expected to be limited

24%   or less of SEA respondents expect to refinance. This reflects a consistent decline in this activity for the past 12 months.

Nearly 40% of those who expect to refinance are motivated to do so to optimize their capital structures or to lower their borrowing costs.