20S&P Global (China) Ratings Expands Its Capabilities in China’s Domestic Bond Market
S&P Global (China) Ratings is authorized to rate issuers and issuances from:
- Corporates
- Financial institutions
- Structured finance
- Panda bonds
As China continues to develop and open its capital markets, more international investors are eager to participate in the domestic markets. As the first wholly foreign-owned credit rating agency allowed to operate domestically in China, S&P Ratings (China) Co., Ltd, a wholly owned, indirect subsidiary of S&P Global, has demonstrated its inherent value to investors across the globe.
In January 2019, S&P Ratings (China) Co., Ltd., was granted a first-of-its-kind license to enter the domestic bond market in China. Based in Beijing with a team of approximately 50 employees, the new rating agency was officially launched in March 2019 and soon after issued ratings and cross-sector research under the brand name S&P Global (China) Ratings and 标普信评.
In October 2020, S&P Global (China) Ratings completed its registration filing for China’s exchange bond market, becoming the first wholly foreign-owned CRA with the broadest remit in China.
The company employs its own ratings’ standards, criteria, and methodology, with compliance and control standards derived from those of S&P Global Ratings. It has adopted a national rating scale in recognition of the size and diversity of China’s domestic capital markets, applying a methodology relevant to those onshore markets. S&P Global (China) Ratings aims to bring onshore an international standard of ratings principles and combine it with on-the-ground local insights to provide forward-looking and granular ratings to domestic and international investors. It is also working with S&P Global Market Intelligence to meet the needs of fixed-income investors interested in China, bringing new depths of insight and analysis to this significant market.
China’s Domestic and Offshore Bond Markets
- China’s offshore bond market:
S&P Global Ratings currently rates offshore bonds for hundreds of companies in China, including issuances in Renminbi and other major currencies. S&P Global (China) Ratings works with these same issuers and assigns domestic ratings to Chinese issuers and debt. - China’s domestic onshore bond market is one of the largest bond markets in the world. S&P Global (China) Ratings’ entry responds to a demand for more transparency and greater granularity around credit risk in the Chinese market. S&P Global views this as a longer-term initiative as China’s debt market develops over the next three to five years.
China’s bond market is one of the largest in the world
Approximately 26% of financing in China is through bond financing
Foreign investors are increasing in China’s bond market
S&P Global (China) Ratings’ entry into China’s domestic bond market is a long-term initiative that will develop over the next three to five years
Note:
Beginning in September 2018, the bond financing category was revised to include both corporate and government bonds. Previously, only corporate bonds were included