One of the world's leading credit insurers is considering putting Hong Kong on its watch list due to a dramatic increase in the number of local companies defaulting on payments.
International leading credit insurer Coface Group yesterday announced it was placing Britain, Germany, Hong Kong, Mexico and Portgual on rating watch with negative implications, suggesting a possible downgrade in their payment ratings.
A Coface rating gauges the average default risk of a company in a particular country based on its political and economic prospects.
A downgrade for Hong Kong would indicate there was a higher risk local companies would be unable to pay outstanding bills owed to buyers on time.
Britain, Hong Kong, Germany, and Portugal have an A1 rating - the highest possible rating - while Mexico is rated A4.
Coface put the Taiwan and the United States on watch with negative implications earlier this year.
