S & P Global awards first place to Chinese issuer in China by foreign agency

SHANGHAI (Reuters) – The Beijing-based S & P Global has become the first international rating agency to rate a Chinese issuer in China, a long-awaited milestone in the country's $ 13 trillion bond market.

Chinese bond investors hope that the ratings of international agencies will help shake up their domestic counterparts, who attribute relatively safe AA ratings to the vast majority of issuers and are subject to severe regulation for exploitative violations.

S & P Global (China) Ratings said to badign an AAA issuer credit rating to ICBC Financial Leasing Co, with a stable outlook. The AAA rating, the highest value of S & P, reflects the "extremely strong ability of the issuer to meet its financial commitments," said the agency.

S & P said that ICBC Financial Leasing's long-term badet and debt mismatch presented a liquidity risk, but various sources of funding and liquidity support from the Industrial and Commercial Bank of China (ICBC) (601398.SS) made the risks "manageable".

ICBC Financial Leasing (ICBCFL) describes itself as a leading leasing company in China, specializing in the leasing of aircraft, ships and industrial equipment. According to Refinitiv data, its four bonds in the Chinese interbank market have a total value of 10 billion yuan ($ 1.46 billion).

The company also obtained a credit rating of the long-term issuer AAA of the China Lianhe Credit Rating Co.

S & P, along with Moody's Investors Service and Fitch Ratings, previously rated ICBCFL's debt issues abroad.

Thursday's rating follows S & P's approval by the People's Bank of China in January to enter the domestic credit rating market, the first time a foreign rating agency was licensed to earn a rating domestic obligations. S & P Global (China) Ratings is 100% owned by S & P Global Inc (SPGI.N).

Fitch, who created a national entity, and Moody's also applied for licenses.

Josh Sheng, investment director of Shanghai Tongshengtonghui Asset Management, said domestic investors needed time to understand the ratings of foreign agencies.

"Mutual acceptance will be gradual," he said.