S&P approved for Chinese credit-ratings services by PBoC
(28 January 2019 – China) The People’s Bank of China (PBoC) has approved S&P Global to commence offering credit-rating services in China, the first global rating house to be granted assent.
S&P is permitted to set up a wholly owned subsidiary based in Beijing with a remit to conduct credit-rating services for debt offerings in the nation's $11 trillion interbank market. In addition to its registration with the People’s Bank of China (PBoC), S&P has also registered with the National Association of Financial Market Institutional Investors (NAFMII), a central bank-backed body that oversees the interbank market. The PBoC said that approval for S&P meets demand from global investors who had increased their holdings of yuan-denominated assets. As more permissions for qualified foreign ratings companies are granted, better credit rating would help disclose risks and improve debt pricing overall.
As trade tensions with the US have risen in recent months, Beijing has accelerated its opening of domestic markets to international investors. In November 2018, American Express became the first foreign credit-card network to win approval from the central bank to set up card-clearing services in China. S&P plans to use a system for rating bonds from businesses, local governments and other issuers there tailor made to "fit the local situation." The China unit will operate separately from the rest of the company, focusing solely on Chinese bonds. Fitch Ratings and Moody's have announced plans to set up wholly owned subsidiaries in China and filed applications to conduct rating services last year. Fitch stated that it is in close communication with regulators. A Moody's statement said it is exploring ways to better serve its customers but didn't address its pending application.
Douglas L. Peterson, S&P's president and CEO, said the approval "reinforces our belief that we are uniquely placed to meet the substantial demand from Chinese issuers and investors for transparent, globally understood and reliable credit ratings, data and research."
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