“Credit ratings of domestic and global agencies: What drives the differences in China and how are they priced?”

“Credit ratings of domestic and global agencies: What drives the differences in China and how are they priced?”

Xianfeng Jiang and Frank Packer

BIS Working Papers No. 648

In contrast to the the domestic rating agencies the top global agencies, headquartered outside of China, rate bonds, that are issued overseas by Chinese corporations, usually with much lower grades. In this paper, Jiang and Packer examine the risk assessments of Chinese (non-financial) companies published by the major Chinese rating agencies and the two largest global rating agencies. Further, they investigate the degree to which rating scales are comparable between domestic rating agencies, as well as between domestic and global rating agencies.