International ratings agency Moody's Investors Service is taking a 49 per cent stake in China Chengxin International Credit Rating to tap the mainland's rising demand for ratings services.
Moody's decision came after years of futile lobbying for direct market access and less than two years after international rival Fitch Ratings pulled out of Chengxin, then the mainland's only Sino-foreign agency licensed to rate yuan bond issues.
Pending regulatory approval, Moody's will buy the shares from the Beijing-based agency's shareholders, China Chengxin Credit Management and an affiliated entity.
The global player had the option to increase its ownership over time as permitted by the mainland authorities, a statement from the company said yesterday.
'This joint venture will allow us to address the growing demand for credit analysis, ratings, research and training in China,' Chester Murray, an executive vice-president of Moody's international business, said in the statement.
Under the agreement, Moody's will provide management expertise, technical support on rating methodologies and analyst training.
Moody's, which can rate Chinese companies for offshore capital market transactions but not domestic offerings, would also market joint ratings with 14-year-old Chengxin to global issuers in the mainland markets, the statement said.