Chinese regulators on Tuesday moved to improve the quality of credit ratings on panda bonds – a yuan-denominated asset class that has seen increased interest from sovereign investors and foreign institutions this year as a key tool to boost Beijing’s push to internationalize the yuan.
Credit rating agencies must adhere to the principles of independence, objectivity and prudence, according to a circular published on the website of the National Association of Institutional Investors in the Financial Market. The central bank’s Self-Regulatory Authority oversees the interbank market, where most panda bonds are traded.
Under the new rules, rating agencies must disclose their rating definitions and provide a map of their scores against internationally recognized credit rating scales.
Classification reports issued by agencies that fail to publish the required maps will no longer be accepted for registration of panda bonds effective August 1, the online notice said.
