Moody’s may take majority control of domestic Chinese rating firm Chengxin
Mar 12, 2019 (China Knowledge) - Global ratings firm Moody’s is said to have reached a framework agreement to increase its holdings in China Chengxin International Credit Rating Co, which is China’s largest credit ratings company to 50% from 30%.
The companies have already approached the People’s Bank of China (PBOC) for feedback on the plan.
Global ratings firms are now looking to enter the Chinese bond market after the PBOC eased requirements last year as they hope to capitalize on a market that is soon to become the world’s second largest bond market.
Earlier in January this year, S&P Global Ratings became the first foreign ratings company to obtain approval from Chinese regulators to grade domestic Chinese bonds through its local unit.
While no precise terms have been made yet, the deal if completed will become the latest example of an international finance firm taking a majority stake in a local Chinese venture, highlighting the recent opening of the country’s financial markets.
Other examples include UBS Group which recently took control of its local securities venture and Mastercard Inc which entered an agreement to set up a bank card clearing company with NetsUnion Clearing Corp with the American firm holding a 51% stake.
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