U.S. Subprime Echoes Seen in China Debt Ratings for Dagong
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Competition among China’s credit-rating companies is intensifying, leading to a slide in standards reminiscent of what happened in the U.S. before the financial crisis, according to Dagong Global Credit Rating Co.
China’s onshore bond market had its first default today, with Shanghai Chaori Solar Energy Science & Technology Co. saying it’s unable to make an 89.8 million yuan ($14.7 million) interest payment. The solar cell maker sold 1 billion yuan of five-year debt in March 2012 and the notes were rated AA, the fourth-highest investment grade, by Pengyuan Credit Rating Co. when they were issued. The debt was subsequently downgraded twice, most recently to BBB+ in April 2013, according to the rating company's website.