Douglas L. Peterson, chief executive officer of S&P Global. Photo: VCG
China’s central bank officially approved the entry of a stand-alone unit of global ratings agency S&P Global Inc. on Monday, making it the first foreign-owned company allowed to rate Chinese domestic bonds.
The world’s top three credit-rating firms — Moody’s Investors Service, Fitch Ratings and S&P — have long coveted China’s bond-rating business. The move comes as part of China’s national push to open its financial sector, but also amid lingering uncertainties surrounding the trade war with the U.S.
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, according to the statement (link in Chinese). That means S&P could rate local yuan-denominated bonds for international investors without tying up with local partners.
“The introduction of global rating agencies is [aimed at] meeting the diversified asset allocation demands of international investors on yuan-denominated assets,” the PBOC said, adding that the move would also improve the rating quality of the bond industry.
The central bank said it would continue to allow other eligible and globally acknowledged players into its market, without offering detailed companies or a timetable.
Fitch said late Monday that its China unit has filed an application with NAFMII and the PBOC for a license. Moody’s could not be reached for comment.