Hong Kong, 12 Oct 2018. Pengyuan International has assigned its ‘AA’ global scale long-term foreign currency ratings to below three U.S. dollar bonds issued by the central government of the People’s Republic of China (“China”) on 11 October, 2018:


1.         5-year bond with issue size of US$ 1.5 billion

2.         10-year bond with issue size of US$ 1 billion

3.         30-year bond with issue size of US$ 500 million


We have equalized the issuance ratings on the bonds with our long-term foreign currency sovereign issuer credit rating on China (hereafter “the rating on China”). This is because the bonds are the direct, unconditional and unsecured obligations of the central government of China and rank and will rank pari passu, without preference among themselves, with all other unsecured public indebtedness of the central government.


The rating on China reflects our view that China’s largely effective and adaptive institutions & policies would continue facilitating the realization of the country’s great economic potentials in the next three years despite significant domestic and external challenges. Thus, China’s growth performance and external position would remain strong during the period.


We could raise the rating on China if China makes substantial progress in strengthening institutions & policies, particularly through strengthening the governance of government, improving the division of job between government and market and enhancing the availability and quality of some key statistics. This would help China realize its great economic potential in a more sustainable way.


We could lower the rating on China if administrative intervention in the economy become much more extensive and intensified and such intervention may become a regular feature of the economy for years to come, or if government resorts to aggressive credit expansion to prop up economic growth. In such scenarios, performance and sustainability of Chinese economy could suffer markedly further down the road.

 

Note: ratings mentioned in this press release are unsolicited ratings.



ANALYST CONTACTS

MEDIA CONTACTOTHER ENQUIRIES

Primary Analyst

Liang Zhong

+852 3615 8341

liang.zhong@pyrating.com

media@pyrating.com
contact@pyrating.com


Committee Chair

Tony Tang

+852 3615 8278

tony.tang@pyrating.com





Date of Relevant Rating Committee: 12 October 2018

Additional information is available on www.pyrating.com


Related Criteria and Research

Related Criteria

?   Sovereign Rating Criteria, 30 May 2018

?   General Principles of Credit Ratings, 21 November 2017

Related Research

?   Credit Report: People’s Republic of China, 7 September 2018

 


DISCLAIMER

Unsolicited ratings – non-participative rating


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