S&P rates Guotai Junan BBB

S&P said it assigned BBB long-term and A-2 short-term issuer credit ratings to Guotai Junan International Holdings Ltd.

The agency also said it assigned cnA long-term and cnA-2 short-term Greater China regional scale ratings to the company.

The outlook is stable.

The ratings reflect the company's status as a core subsidiary of Guotai Junan Securities Co. Ltd., S&P said.

The agency said it expects potential extraordinary government support to the parent company will be indirectly available to Guotai Junan International.

That is why the ratings on the parent company and subsidiary are equalized, S&P said.

The company’s group status reflects the company's key role and meaningful business contribution to the wider parent group, the agency added.

That contribution also is expected to increase over the next few years, S&P said.

These strengths are tempered by the company’s small market share and significant reliance on short-term funding for its margin finance business, the agency said.

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