Bangkok--7 Feb--Standard & Poor's The January Senior Loan Officer Opinion Survey on Bank Lending Practices showed that general lending conditions continued to constrict, according to an article published today by Standard & Poor's. The report, titled "U.S. Credit Comment: Banks Tighten Lending As Loan Quality Is Expected To Deteriorate In 2008 (Premium)," says that almost one third of banks surveyed reported tightening commercial and industrial (C&I) loan standards for large- and medium-sized borrowers, as well as small-sized borrowers. "Both terms and premiums on loans also appear to be tightening on C&I loans and credit lines," said Diane Vazza, head of Standard & Poor's Global Fixed Income Research Group. "Banks have cited a less favorable economic outlook, worsening of industry-specific problems, and reduced risk tolerance as the general reasons behind the tougher loan conditions." As a special question, banks were asked about their outlook on loan quality (delinquencies and charge offs) in 2008, assuming economic activity is in line with consensus forecasts. Of the 23 respondents, 19 expected their loan book quality to deteriorate. Ms. Vazza added, "As investors become more risk averse and banks become reluctant to extend credit lines, the ability for firms to borrow to invest in their businesses or conduct M&A transactions is restrained and more costly, which can restrict economic growth. Moreover, tighter lending conditions can exacerbate defaults as firms in distress may not be able to obtain the financing they need to remain solvent." The report is available to RatingsDirect subscribers who have upgraded their package to include the Global Fixed Income Research add-on. RatingsDirect is the real-time Web-based source for Standard & Poor's credit ratings, research, and risk analysis, at www.ratingsdirect.com. If you are not a RatingsDirect subscriber with the Global Fixed Income Research add-on, please contact your local Standard & Poor's representative or [email protected] for further information. Ratings information can also be found on Standard & Poor's public Web site at www.standardandpoors.com; under Credit Ratings in the left navigation bar, select Find a Rating, then Credit Ratings Search. Members of the media may request a copy of this report by contacting the media representative provided.