Investors outpace rating agencies in downgrading China’s FIG debt

Deteriorating credit metrics in China’s financial sector expose the weaknesses of its domestic rating agencies.
The default potential within the corporate sector grabs all the headlines, but it is the financial sector where the real downgrades are taking place according to Wind data.
 
The financial data provider has become one of investors’ main sources of credit analysis in a market, where the official rating agencies do not offer deep enough differentiation between issuers. For what Wind data shows is that 1,129 financial bonds had “implied ratings downgrades” between January 31 ,2018 and January 13 2019.
 
In Wind’s terminology, this means that a bond should have been downgraded based on its trading performance. By contrast,...
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