Citi: Ten Things You Need to Know About Ratings in APAC before November Starts / 花旗：亚太区评级十大新鲜事·2021年11月刊
Country / Territory Theme
国家/地区主题
?
1. Moody’s believes that 'Common prosperity' agenda proposed by Chinese government will create transition risks, with longer-term benefits if well implemented.?China's authorities have reemphasized the need for the country to build “common prosperity,” with the goal of lowering income inequality and improving the social safety net to achieve long-term economic sustainability. Moody’s expect increased credit risks resulting from a period of regulatory uncertainty in the short time, and prolonged uncertainty could produce more negative effects on private investment, productivity, capital efficiency and growth. In the medium to long term, effective implementation would be positive for sovereign credit quality, including higher consumption, lower excess savings and more sustainable growth. Moody’s expect different risks and opportunities from the policies, depending on the sector and individual company.
1．?穆迪认为，中国政府提出的“共同富裕”政策议程将带来转型风险，但若实施得当将带来长期益处。中国当局再次强调国家建设“共同富裕”的必要性，目标是减少收入不平等和完善社会保障体系，从而实现经济的长期可持续发展。?穆迪预计短期内的监管不确定性将导致信用风险上升，而如果不确定性长期存在，则可能对私人投资、生产力、资本效率和增长产生更多负面影响。从中长期来看，有效实施将有利于主权信用质量，包括促进消费、降低过剩储蓄和实现可持续增长。穆迪预计政策会带来不同的风险和机遇，具体还将取决于行业和个别公司。
?
2. On 15 October, the People's Bank of China and the China Banking and Insurance Regulatory Commission designated 19 commercial banks as domestic systemically important banks (D-SIBs).?The regulators classified the banks into four groups that are subject to varying Core Tier-1 capital surcharges and minimum requirements for leverage ratios. Moody’s views the D-SIB designation as credit positive because it will subject the selected banks to tightened supervision, helping to reduce systemic risk and maintain financial system stability. Both S&P and Fitch notes that D-SIB designations will be one of several factors that influence its view of a bank's systemic importance and likelihood of receiving sovereign support, while S&P highlights that such designation is not a necessary condition to position sovereign support. For example, China Bohai Bank and China Zheshang Bank, both of which are not D-SIBs list, enjoy similar support assessment as other national joint-stock commercial banks in China.
2. 10月15日，中国人民银行及中国银行保险监督管理委员会将19家商业银行认定为国内系统重要性银行。监管机构将这些银行分为四组，分别适用不同的核心一级附加资本和最低杠杆率要求。穆迪鉴于这些银行将受到更严格的监管，有助于降低系统性风险和维持金融体系稳定，认为该系统重要性银行认定为信用利好。标普和惠誉均指出，系统重要性银行认定将是影响其对某一银行的系统重要性及获得主权支持的可能性的看法的考量之一，但标普强调，系统重要性银行身份并不是获得主权支持评级提升的必要条件。例如，渤海银行和浙商银行均不在名单上，但标普仍然认为政府对这两家银行的支持程度与其他股份制银行相仿。
?
3. Moody’s?changed?the outlook for India’s sovereign rating from negative to stable and affirmed the Baa3 rating. As a result, most Indian corporates and FIs’ negative outlook changed to stable in tandem.?Moody’s positive move is based on improvement in the solvency of the financial sector, with higher capital cushions, expectations for a strong recovery in economy growth and a gradual reduction of fiscal deficits. Asset quality deterioration has been moderate and?access to capital markets has steadily improved for public-sector banks. In the?corporate sector, revenue and earnings are expected to return to pre pandemic levels in the current fiscal year thereby?stabilizing the leverage and interest coverage ratios. Improving credit trends across industries?further support the?stable outlook.
3.?穆迪将对印度主权评级的展望从负面上调至稳定，并确认其Baa3评级。受此主权评级展望影响，绝大部分挂有负面展望的企业和金融机构的展望调整为稳定。?穆迪的正面评级动作的主要基于较高的资本缓冲、强劲经济增长的复苏预期、以及财政赤字的逐步减少，使得金融机构偿付能力增强。公共部门银行资产质量的恶化有所缓和，使资本市场通道稳步改善。印度企业预计本财年的收入和盈利将恢复到疫情前的水平，杠杆率和利息覆盖率回稳。各行业信贷趋势的改善进一步支撑稳定的展望。
?
Industry Theme
行业主题
?
4. While all three rating agencies have observed that Central Bank Digital Currencies (‘CBDC’) are evolving swiftly?with potential far-reaching implications to the future of banking, in Asia-Pacific the implication could vary depending on the region. S&P notes that China is leading from the front, when it began pilot trials for its retail CBDC in 2020, and is better-progressed compared with other jurisdictions in Asia-Pacific. Singapore monetary authority recently concluded its five-year digital currency project.?Collaborations abound elsewhere including in separate multi-country projects in Japan and Hong Kong, and in Australia, where the central bank is partnering with banks and the U.S. developer of the Ethereum blockchain.?However, in APAC EM banking sectors, cash in circulation continues to be high despite the rise in digital payments. Future of banking remains uncertain given the risk of banks being disintermediated, though that is not likely to happen in the near term. For instance, in China the CBDC pilot projects’ impact on payment service providers is limited at present, but wider adoption of the CBDC could lead to changes in data sharing and competition, as observed by Fitch. In the longer term, this could lead to changes to the revenue structure of Alipay and Wechat Pay, which dominate non-bank mobile-based payments.
4.?虽然三大评级机构都注意到央行数字货币正在迅速发展，且对银行业的未来可能产生深远影响，但在亚太，其影响可能因地区而有所不同。标普提到，中国在一开始就处于领先地位，早在2020年即开始进行央行数字货币试点，与亚太其他司法管辖区相比取得了更好的进展。新加坡金融管理局最近完成了为期五年的数字货币项目。其他地区也不乏合作项目，包括日本和香港的独立多国项目，以及澳大利亚中央银行和两家主要银行和以太坊区块链的美国开发商合作。然而，在亚太新兴市场银行业，尽管数字支付有所增加，但现金流通量仍很高。鉴于银行面临去中介化的风险（尽管在短期内不太可能发生），银行业的未来仍存在不确定性。例如，中国的央行数字货币试点项目目前对支付服务商的影响有限，但是，惠誉指出，央行数字货币的更广泛采用可能会导致数据共享和竞争方面的变化。从长远来看，这可能会导致非银行移动支付领域的主导者支付宝和微信支付的收入结构发生改变。
?
5. Fitch has finalized its update on Chinese Property Developers’ rating navigator. As a result of the update,?29 Chinese property developers’ rating are placed Under Criteria Observation (UCO).?Such review scope is much larger than originally expected, mainly due to the recent liquidity crunch in the sector. Fitch expects most negative rating actions are likely to be limited to one-notch downgrades or revisions to rating Outlooks, however, we note that multiple two notch downgrades cases so far, such as Guangzhou R&F, Kaisa, Risesun, Yango, as a result of the review. In this navigator update, Fitch tends to recognize less JV business contribution than before. It also excludes funds in regulated presale-proceeds accounts?from readily available cash?calculations in leverage calculations. We expect Fitch to resolve the review for those names under review for liquidity concerns as a priority.
5.?惠誉对中国地产商的评级导引进行了更新。受此影响，29家中国地产企业会逐一进行评级复核。鉴于近期的行业流动性吃紧，复核企业的范围远超之前预期。惠誉认为此次复核会使得部分企业的评级调降一级或评级展望出现负面调整，但我们从已完成复审的企业的结果中看到，包括富力、佳兆业、荣盛、阳光城等企业的降级幅度达到了两级。在本次评级导引更新中，惠誉较此前对联合营项目的信用资质认定较以往收紧，且在杠杆率计算时将受监管的预售款账户中的资金排除在随时可用现金之外。我们预计惠誉会优先对复审范围内受到市场流动性影响较大的企业进行复审。
?
Key Rating Actions
主要评级行动
?
6. S&P upgraded ratings of Tata Group companies based on revised group assessment. Tata Steel and Tata Motors received two notch uplifts to BBB-/Stable and BB-/Stable, while JLR received a one notch uplift to B+/Stable.?Reevaluation of Tata Sons as a parent company from an investment holding company warranted the rerating of the group companies. This was based on the increasing ownership of Tata Sons in the group companies, higher influence over financial policy and consistent evidence of extraordinary support to group companies. Tata Steel and Tata Motors were assessed as strategically important companies to the group helping them get a two notch uplift while JLR being a step down subsidiary of Tata Motors only got a one notch uplift.?On the other hand, from Moody’s and Fitch both Tata Steel (Ba1/BB) and Tata Motors (B1/--) receive +1 notch uplift due to the expectation of timely, ongoing and?extraordinary support?from Tata Sons. JLR (B1) has not received ratings uplift from Moody’s.”
6.?标普根据修订后的集团评估方法论上调了塔塔集团（Tata Group）成员公司的评级。塔塔钢铁（Tata Steel）?和塔塔汽车（Tata Motors）分别调升两个子级至BBB-/稳定和?BB-/稳定，而捷豹路虎（JLR）调升一个子级至B+/稳定。标普将Tata Sons的定位由原来的投资控股公司改为母公司，从而引发对集团成员公司的重新评级。此次调整主原因是Tata Sons在集团成员公司中的所有权不断增加、对成员公司财务政策的影响力提高，以及一贯为集团成员公司提供特别支持。塔塔钢铁和塔塔汽车被评估为对集团具有战略重要性的公司，因而获得两个子级的调升，而捷豹路虎作为塔塔汽车的下级子公司仅获得了一个子级的调升。另一方面，由于预期能得到Tata Sons的及时、持续、特别的支持，穆迪和惠誉将塔塔钢铁（Ba1/BB）和塔塔汽车（B1/--）的评级调升一个子级。捷豹路虎（B1）尚未获得穆迪的评级调升。
?
7. Moody’s assigned a B1 to Cinda AMC(A3)’s proposed AT1 rating, 2 notches below Cinda AMC’s standalone of ba2, which marks a revolutionary deviation from the 3 notches standard notching.??Such 2-notch adjustment reflects (1) Moody's standard notching guidance for?preference securities?with loss triggered at the?point of non-viability (PONV)?on a contractual basis and with a non-cumulative dividend deferral option; and (2) the assumption that Chinese authorities or government are likely to exhaust other remedies before declaring Cinda AMC to be non-viable. Moody’s is comfortable with the tightened notching as they believe that government has more room to maneuver given the flexibilities of AMC regulatory framework compared to banks and government would exhaust all remedies available before declaring PONV. Cinda’s proposed AT1 instrument is neither rated by S&P nor Fitch.
7.?穆迪赋予信达资产管理（A3）?拟发行的额外一级资本（?AT1）?证券以B1评级，比信达资产管理的独立评级ba2低2个子级，该评级调整小于穆迪对AT1的标准3个子级调整，具有里程碑意义。2个子级调整体现穆迪在标准银行AT1评级调整基础上，考虑到中国当局或政府可能会在宣布信达无法存续之前穷尽其他补救措施的假设。换言之，穆迪认为，与银行相比，资产管理公司的监管框架更具有灵活性，因此政府有更大的回旋余地在须宣布达到企业无法存续前即成功完成企业救助。
?
8. S&P upgraded?Manappuram Finance?to 'BB-' with a Stable outlook, as the gold-based lending business proved to be an effective counterbalance to the weakness in India's microfinance segment. The company is expected to outperform its non-gold NBFI peers over the next 12 months driven by its lower credit costs, above-average profitability, and strong capitalization. But the non-gold loan portfolio (~30% of total loan book) will continue to be under stress, though billing and?collection efficiency?are increasing back to close to pre-COVID-19 levels, hinting at improving asset quality trends. Company’s credit profile would see further improvement if access to longer-term funding increases reducing?the rollover risk associated with short-term wholesale funding. The Company continues to be rated at BB-/Stable by Fitch.
8.?标普将Manappuram Finance评级调升至“BB-”，展望稳定，因为事实证明，基于黄金的贷款业务并不会受到印度疲弱的小额信贷行业的影响。由于信贷成本较低、盈利能力高于平均水平和充足的资本金，公司今后12?个月的表现有望优于非黄金类非银行金融机构（NBFI）同行。?但是，非黄金贷款组合（占贷款总额的30%左右）将继续承受压力，不过计费和催收效率正在回升至接近疫情前的水平，意味着资产质量正趋于改善。如果获得较长期融资的机会增加，以至于短期批发融资相关的展期风险降低，则公司的信用状况将进一步改善。惠誉目前对该公司仍然维持BB-/稳定评级。?
?
9. Herd behavior occurs as agencies take massive negative actions on Chinese properties.?Apart from Fitch taking massive reviews as mentioned earlier in the bulletin, the Chinese property analysts are busy reviewing their portfolio as well as a result of internal pushes from global seniors and external pushes from investors. In the past month, Moody’s has taken 10+ downgrade actions on Chinese property names, including Kaisa, Central China, Yuzhou, Guangzhou R&F etc. The agency has also put multiple names under watch for downgrade and changed outlooks of a handful of names. S&P actions during the past months on the sector have been more selective than Moody’s, while it highlights the rating pressures faced by single-B rated developers in its industry research. In addition to bank and bond investors’ skittish view on the sector, developers’ weakened cash generation amid tough market conditions and industry down cycle further pressures their liquidity. In light of the recent defaults of Sinic and Fantasia, agencies became more conservative on their unrestricted cash assumptions in leverage calculations.
9.?评级机构纷纷调降中国地产企业评级，呈现一定跟风之势。除在上文中提到惠誉对中国地产业进行大范围评级复审外，其他两家评级机构的地产分析师也纷纷在内部大佬和外部投资者爸爸的压力下对地产企业评级进行复核。仅在过去一个月内，穆迪下调了超过10家的地产企业评级，其中不乏耳熟能详的佳兆业、建业地产、禹州、广州富力等等。穆迪还将多家地产企业放在了降级观察清单上，也对几家企业的评级展望进行了下调。标普在同期对地产企业的评级下调会更具有选择性，但与此同时他们在行业报告中也高调指出了单B评级发展商所面临的评级压力。除了银行和债券投资者对在恒大事件后变得更加谨慎，在低迷的市场环境和行业下行周期中，房地产开发商的现金流产生能力的减弱，对其流动性构成进一步压力。鉴于近来新力和花样年的违约经验，评级机构纷纷收紧其对于非受限现金在杠杆率计算里的假设。
ESG Theme
ESG主题
?
10. S&P has unveiled its holistic roadmap on ESG, consisting of not only credit materiality, but also stakeholder materiality, i.e. ESG outside of credit ratings. S&P is advancing its transparency efforts on ESG and plans to roll out issuer level ESG credit indicators for rated corporates, infrastructure, banks and insurer by end of the year. S&P also reiterates that its long-term credit rating do not have a pre-determined time horizon, which means long-term ESG risks could be factored in as long as it is certain and material enough from S&P’s perspective. In our view, S&P’s ESG in Credit methodology and scoring system highlights the ESG-specific considerations and how these are factored into the existing credit rating methodology, while Moody’s ESG methodology and scoring covers a broader range of factors that could in some cases be a mix of ESG-specific and traditional credit factors. While the latter’s scope seems more comprehensive, its scores could in some cases be overridden and distorted by some non-core ESG risks. Back in September, Sustainable Fitch has rolled out its comprehensive?ESG offerings?to supplement the ESG Relevance Scores, which was rolled out in 2019 as the first ESG in Credit scoring from the top three credit rating agencies.
10.?标普公布了其整体ESG路线图，其中涵盖了ESG在信用分析中分析框架，以及ESG在信用评级之外的?分析逻辑。标普正在努力提高ESG评级的透明度，并计划在年底前为受评企业、基础设施建设公司、银行和保险公司推出发行人层面的ESG信用打分。标普还重申，其长期信用评级没有预定的时间范围，这意味着只要从标普的角度来看，只要长期ESG风险足够确定的且重大，就可以将其考虑在信用评级中。我们认为，标普的ESG?信用方法和评分系统突出了ESG特定的考虑因素以及这些因素如何融入现有的信用评级方法，而穆迪的ESG方法和评分则涵盖了更广泛的因素，在某些情况下可能是ESG特定信用因素与传统信用因素的混合。虽然后者的范围似乎更全面，但在某些情况下，其评分可能会被一些非核心ESG风险凌驾和扭曲。今年九月，惠誉可持续发展部分推出了全方位的ESG产品，为其ESG相关性打分产品提供了有机补充。惠誉早在2019年就率先在信用评级中推出了ESG相关性打分，在三家评级机构中拔得头筹。
?
Bonus
买十赠一
11.?S&P believes China’s auto recovery is hitting a speed bump, with a lower growth than expected due to auto-chip shortage continuing- China's light vehicle sales will likely grow by 1%-3% in 2021.?This contrasts with S&P’s prior assumption of 5%-9% growth, and is down from the 9.0% growth seen in the first 9 months of 2021. However, S&P believes there would be a gradual easing of chip shortages next year, and demand remains healthy, as shown by a sales-to-production ratio of over 100%, declining dealer inventories, narrowing discounts, and surging used car sales. Other than that, S&P also observed that China's new EV sales climbed 185% in the first 9 months of 2021, due to a low base, improving product offerings, and increasing consumer acceptance. The rating outlooks on rated carmakers and suppliers have been stabilizing through the year, on improved demand. S&P believes the impact from power shortages will be limited.
11.?标普认为中国汽车行业复苏由于汽车芯片持续短缺，导致行业增速低于预期——2021年中国轻型汽车销售增长可能为1%-3%。这一速度低于标普此前假设的5%-9%，也低于2021年前9个月9.0%的增长率。不过，标普认为明年芯片荒将逐渐缓解，需求将保持持续旺盛，核心体现在于产销率超过100%、经销商库存下降、折扣收窄，以及二手车销量激增。除此之外，标普还观察到，由于去年数据基数较低、产品不断改善以及消费者接受度不断提高，中国2021年前9个月的新电动汽车销量增长了185%。由于需求改善，受评汽车制造商和供应商的评级展望在过去一年保持稳定。标普认为电力短缺对行业的影响有限。
?
---
Source: Moody’s, S&P and Fitch
FOR INSTITUTIONAL CLIENTS ONLY. NOT FOR ONWARD DISTRIBUTION. The content of the material is for educational and informational purposes only and does not constitute an offer or recommendation to purchase or sell any products, services, offer financing or enter into any transactions. The materials purport to provide only an overview of trends, perspectives, and initiatives relating to digital and other emerging technologies, some of which may not be available or relevant in all jurisdictions. Local rules, laws and regulations may apply. The information contained herein is also subject to change at any time without notice, and shall not be relied on in making any investment decisions. Prior to making any investment decision, you should determine, without reliance on us our affiliates, the economic risks and merits (and independently determine that you are able to assume these risks), as well as the legal, tax and accounting characterizations and consequences of any such transaction.
Information contained in this document may not be reproduced or disseminated, whether in part or in whole, without the prior written consent of Citi. This document is not intended for distribution to, or use by any person in, a jurisdiction where such distribution is prohibited by law or regulations.
? 2021 Citigroup Global Markets Asia Limited. All rights reserved. Citi and Arc Design and CitiDirect are trademarks and service marks of Citigroup Inc. or its affiliates, used and registered throughout the world.