FAST FIVE: "Please Don't Call At This Time": Bond Investors Stunned After First Trade War Casualty Plunges 66% In Days

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Over a year in, the trade war between the US and China has claimed its first corporate casualty: a large Indonesian textile maker which missed a dollar loan payment last week is putting a fresh spotlight on how the stress from the geopolitical conflict is roiling global credit markets.

On Monday, S&P slashed its rating of dollar bonds sold by a subsidiary of Indonesia's Duniatex Group (also known as Delta Merlin Dunia Textile) by six notches to CCC-, citing “significant liquidity challenges” after another group company missed a payment on a syndicated dollar loan that had matured on July 10.

The ongoing US-China trade tensions are “significantly hurting” the Indonesian textile market, and Duniatex's liquidity was affected by plummeting prices due to the oversupply of imported cheap fabric from China, S&P also said.

Yet while US corporations can easily issue new debt and loans at ridiculously, some emerging market corporations are finding themsleve locked out; as a result more stress is emerging in Indonesia.

“This event reminds us of potential problems outside of China as well, with a lack of disclosure for private companies,” said Raymond Chia, head of credit research for Asia excluding Japan at Schroder Investment Management Ltd.

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