Moody's moves into China

Moody's agrees to buy a 49% stake China's first credit-rating company.
Moody's Corporation said on Thursday (April 13) it agreed to acquire 49% of China Cheng Xin International Credit Rating Co Ltd.

The parent company of one of the big three credit ratings agencies declined to release terms and conditions. But it did say that "Moody's will have the ability to increase its ownership over time as permitted by Chinese authorities. The financial impact to Moody's Corporation is not material."

China Cheng Xin Interational, established in 1992, was the first nationwide domestic credit rating agency created with the approval of the People's Bank of China. Headquartered in Beijing, with a staff of over 40 professionals, the agency specialises in providing rating opinions on corporate bonds, convertible bonds, financial institutions, structured finance and short term financing paper.

Moody's says it will provide management expertise, technical support on rating methodologies, and analyst training. As a licensed domestic credit rating agency, China Cheng Xin International will continue to provide domestic ratings reflecting relative credit risk within China, while Moody's will continue to provide globally comparable ratings for cross-border financings. Moody's and China Cheng Xin International also plan to market joint ratings to global issuers in the local Chinese markets.

"Moody's will benefit from China Cheng Xin International's local market knowledge and China Cheng Xin International will benefit from Moody's experience in global credit ratings and analysis," says Raymond McDaniel, chairman and chief executive officer of Moody's Corporation, the parent company of Moody's Investors Service.
¬ Haymarket Media Limited. All rights reserved.