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China tightens credit-rating rules for panda bond issuance
From August 1, ratings without grade mapping to international scales will not be accepted for panda bond registration, according to a regulator circular.
Chinese regulators have moved to improve credit-rating quality for panda bonds, a yuan-denominated debt market that has drawn more foreign sovereign and institutional investors this year as part of Beijing’s push to internationalise the yuan.
As reported by SCMP Economy, a circular posted by the National Association of Financial Market Institutional Investors requires credit-rating agencies to follow principles of independence, objectivity and prudence, and to disclose their rating definitions.
The rules also call for agencies to provide a mapping of their grade scales to internationally recognised credit-rating benchmarks, with the mapping needed for panda bond registration.
According to the circular, rating reports that do not publish the required mapping will not be accepted for registration from August 1.