Moody's eyes Cinda AMC, Orient, Great Wall for cut

Moody's Investors Service said it placed on review for downgrade the A3 local-currency and foreign-currency issuer ratings of China Cinda Asset Management Co., Ltd., China Orient Asset Management Co., Ltd. and China Great Wall Asset Management Co., Ltd.

Additionally, the agency placed the debt ratings and medium-term note program ratings of these three AMCs' offshore financing vehicles on review for downgrade.

Moody's also placed the B1(hyb) foreign-currency preferred stock rating of Cinda AMC on review for downgrade.

“The review of the ratings reflects Moody's decision to reassess the very high government support assumed in the ratings of these three AMCs, in the light of developments at China Huarong Asset Management Co., Ltd. (Huarong AMC, Baa2 RUR). While the introduction of strategic state-owned investors at Huarong AMC, as announced by the company on Aug. 18, 2021, appears to represent a bail-out that will not involve losses to creditors, there are features of the resolution that warrant a reassessment of the very high level of support assumed for all four AMCs,” the agency said in a press release.

Moody's said it will examine if the lack of transparency over Huarong AMC's resolution is consistent with the very high government support assumption.

“Huarong has AMC operated without publishing its financial statements beyond mandated disclosure deadlines, and there continues to be uncertainty about the timing and extent of the capital to be injected and the extent of Huarong AMC's business restructuring,” the agency said.

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