S&P Global rates China domestic issuer in first by foreign agency

ICBC Financial Leasing describes itself as a leading leasing firm in China, involved in leasing ships, aircraft and industrial equipment. (AFP)
Updated 11 July 2019

S&P Global rates China domestic issuer in first by foreign agency

  • S&P Global (China) Ratings assigns AAA issuer credit rating to ICBC Financial Leasing Co, with a stable outlook
  • Company also has AAA long-term issuer credit rating from domestic agency China Lianhe Credit Rating Co

SHANGHAI: The Beijing-based unit of S&P Global on Thursday became the first international credit rating agency to rate a domestic issuer in China, a long-awaited step in the development of the country’s $13 trillion bond market.
Chinese bond investors hope that ratings by international agencies will help to shake up domestic counterparts which assign relatively safe AA ratings to the vast majority of issuers, and have come under regulatory fire for operational violations.
S&P Global (China) Ratings said it assigned a AAA issuer credit rating to ICBC Financial Leasing Co, with a stable outlook. The AAA rating, S&P’s highest, reflects an issuer’s “extremely strong capacity to meet its financial commitments,” the agency says.
S&P said a mismatch in the durations of ICBC Financial Leasing’s assets and debt presented some liquidity risk, but diverse funding sources and liquidity support from parent Industrial and Commercial Bank of China (ICBC) made the risks “manageable.”
ICBC Financial Leasing (ICBCFL) describes itself as a leading leasing firm in China, involved in leasing aircraft, ships and industrial equipment. Its four outstanding bonds in China’s interbank market are worth a total of 10 billion yuan ($1.46 billion), according to Refinitiv data.
The company also has a AAA long-term issuer credit rating from domestic agency China Lianhe Credit Rating Co.
S&P, along with Moody’s Investors Service and Fitch Ratings, previously assigned ratings for ICBCFL’s overseas debt issues.
Thursday’s rating follows S&P’s approval by the People’s Bank of China in January to enter the domestic credit rating market, the first time a foreign rating agency received a license to rate domestic bonds. S&P Global (China) Ratings is wholly owned by S&P Global Inc.
Fitch, which has established a domestic entity, and Moody’s have also applied for licenses.
Josh Sheng, chief investment officer at Shanghai Tongshengtonghui Asset Management, said domestic investors needed time to understand foreign agencies’ ratings.
“Mutual acceptance will take place gradually,” he said.


Case against Ghosn excuse to get him out of Nissan, claim lawyers

Updated 13 November 2019

Case against Ghosn excuse to get him out of Nissan, claim lawyers

  • The former motor giant chief’s legal team has alleged that both his arrest and the prosecution efforts have been illegal

TOKYO: The drama surrounding the arrest of Carlos Ghosn, former boss of motor giants Nissan and Renault, has yet to reach its climax. Yet the plot continues to thicken with each new development.

On Monday, Ghosn’s defense lawyers unveiled court submissions highlighting the circumstances in which the 65-year-old executive was arrested and subsequently held in detention.

“We believe that Mr. Carlos Ghosn is innocent. We believe that the arrest and the prosecution efforts thus far are illegal and therefore Mr. Ghosn should be immediately released,” the head of his defense team, Junichiro Hironaka, said during a press conference at the Foreign Correspondents Club of Japan in Tokyo on Monday.

Hironaka claimed that Nissan wanted to kick out Carlos Ghosn from the company and therefore put together a team dedicated to searching around for something that would justify them to do that.

“This prosecution motion wasn’t initiated because the prosecution side believed that Mr. Ghosn had committed an illegal act. Fundamentally there is a problem with this being treated as a criminal act,” he said.

Hironaka further said that the prosecutor’s office is supposed to be acting in the public good for everyone and not behalf of a specific corporation.

“From the investigation level, there were various problems and mistakes with this case. Furthermore, the Japanese persecution office can’t reach overseas so they rely on Nissan employees to go into Mr. Ghosn’s offices and residences and removed objects illegally,” he said.

Hironaka said there is no evidence to support the alleged wrongdoing claim that Nissan made payments to SBA in Oman, and Ghosn re-directed that money to himself or his family.

“The amounts that were paid by Nissan matched exactly the amounts due to SBA,” he said.

The lawyer had a similar response to the reports connecting some donations by Ghosn to a school in Lebanon that would somehow benefit himself. “There is absolutely no evidence or factual basis for indicating that,” Hironaka said.

He said that his team is trying to access correct information and find out what evidence the prosecution might have.

“I have made an effort to share information with the media, including the foreign media, during this whole pre-trial motion,” he said.

Under the Japanese system, the prosecutors are not required to disclose all the evidence at their disposal. Japanese law requires that prosecutors must disclose anything related to any evidence related to the specific filings they make.

They must also disclose any evidence that is related to the filings that are made by the defense counsel. However, there is no requirement for them to disclose evidence from other parts.

Ghosn was arrested at Tokyo’s Haneda Airport on Nov. 19, 2018, on multiple charges related to his stewardship of the two companies.

The cases involved not only Nissan-Renault and Japan’s Mitsubishi Motors (part of the Franco-Japanese alliance), but also the Japanese and French governments along with various key players from Asia and the Middle East.

Nissan was on the brink of bankruptcy in March 1999, with about 2 trillion yen ($17.6 billion) in interest-bearing debt.

This is when it entered a capital partnership with major French automaker Renault SA. Ghosn has been credited for turning the company around dramatically since then.

However, fears that the high-profile CEO and chairman was planning to merge Nissan into a much larger multinational motor alliance appeared to have fueled speculation regarding the future of the company.

It was reportedly argued within Prime Minister Shinzo Abe’s government that the automaker would no longer be recognizably Japanese.

The case has larger ramifications and the two governments have routinely become involved in discussions related to its future.

According to news reports, when Macron and Abe met in Buenos Aires, the French president asked that the Franco-Japanese alliance be maintained.

On being asked by Arab News Japan about reports of a prosecution team visiting Saudi Arabia and Oman, Hironaka confirmed that the visit indeed took place after Ghosn’s arrest.

“However, we have not been given any access to any information that they may or may not have gathered there,” he said.