Moody’s: Chinese asset management companies to stable

Moody's Investors Service said it affirmed the A3 long-term and P-2 short-term issuer ratings of four Chinese distressed asset management companies (AMCs): China Cinda Asset Management Co., Ltd.; China Huarong Asset Management Co., Ltd.; China Orient Asset Management Co., Ltd.; and China Great Wall Asset Management Corp.

Their baseline credit assessments (BCAs) remain unchanged.

At the same time, the agency changed the outlook on the four companies to stable from negative.

Moody's also affirmed the medium-term note (MTN) program ratings and note ratings issued by the companies' offshore subsidiaries and changed the outlook to stable from negative.

Moody’s said the primary drivers for the change in the outlooks to stable from negative on the big four AMCs' A3 long-term issuer ratings are:

• Government support for these companies is unlikely to change over the medium-term;

• Each company's rating is resilient to a hypothetical downside scenario in which the sovereign rating is downgraded by one notch. The agency said it considered this scenario in view of the current negative outlook on the sovereign rating, and which is a key input into the ratings of the four AMCs' respective support providers; and

• The companies' standalone credit profiles, as indicated by their BCAs in the case of GRIs are appropriate at current levels.

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