Rating Services

Credit ratings are an analytical result of the current credit worthiness of a rated entity or a debt issue and the rating agency’s forward looking opinions on their credit risk. As such, the higher the credit rating the stronger the credit worthiness of the Rated Target, the lower the credit rating is the weaker its credit worthiness. Credit ratings are assigned by independent credit rating agencies based on fair, objective principles, and scientific methodology. Credit worthiness of a Rated Target is evaluated on its capacity and attendance to fulfill its financial obligations within a specific period or under certain specific conditions.

CCXAP adopts its set of credit rating codes to summarize credit rating results and opinions. To differentiate these from CCXAP’s parent company and its subsidiaries, each CCXAP’s credit rating code has a small letter “g” attached.

China Chengxin (Asia Pacific) Credit Ratings Company Limited uses simple, consistent and comparable rating codes to represent the credit strength of the rated entities and issues.

A long-term credit rating refers to a rating for a period of more than 12 months.

A rating outlook is the medium and long-term trend of credit rating of a rated entity. In formulating a rating outlook, CCXAP considers the potential change of economical and commercial factors over a medium and long-term perspective in a period of 12 to 18 months.

A short-term refers to a rating for a period less than 12 months.

CCXAP’s long-term credit ratings can be mapped alongside short-term credit ratings, as follows:

Like all international credit rating agencies, CCXAP adopts credit rating principles and methodologies appealing to international investors, creditors and financial intermediaries. The rating principles are universal in nature although the rating methodologies adopted by each credit rating agency differ to a certain extent.  CCXAP’s credit rating methodologies also differ to a certain extent from its parent company and the latter’s subsidiaries in China. The differences mainly lie in the weighting of the credit factors concerned by the market participants in the international market. Therefore, credit ratings assigned by CCXAP of the same rated entities rated by its parent company and its parent’s subsidiaries may be different from the domestic credit ratings.

CCXAP carries out its credit rating analysis services independently in Hong Kong, but on a needs basis may request its parent company or its parent’s subsidiaries to help collect data in China for its analysts doing credit rating in their Hong Kong office. There is no fee-sharing arrangement in this regard.

Transparency is a performance compliance requirement. CCXAP discloses relevant information about its rating codes, rating processes, rating principles, rating methodologies, operational policies, and rating disclosures on its website.

CCXAP changes the credit rating of a rated entity or a debt issue when CCXAP finds changes in the credit situation of the rated entity or a debt issue that may strengthen or weaken the rated entity’s or the debt issue’s credit worthiness. Changes in credit rating may also be made due to the annual surveillance result or any critical information obtained from the market.

CCXAP ensures the comparability of ratings among different industries and geographic regions through its rating performance research. CCXAP considers that rated entities or debt issues with the same credit rating should possess similar, but not necessarily identical creditworthiness. It also considers comparability of ratings can enhance ratings' practicality. However, at different times within different geographical regions and among different market segments, the impact of an economic cycle on a rated entity’s business operating conditions may differ. This is a major factor in causing difficulties for a credit rating agency to achieve comparability of ratings.