The Issuer Rating upgrade reflects Lionbridge Capital’s leading niche franchise market position in China’s truck leasing market, growing and adequately managed leasing assets with low delinquency and loss ratios despite the COVID-19 outbreak, limited duration mismatch between its leasing receivables and debt, as well as the increased financial flexibility in accessing the bank and capital markets as a result of the positive impact from CCB Trust Co. Ltd.’s (“CCBT”) shareholding. The rating also considers its concentrated business profile, rapid growth in its loan facilitation portfolio, secured funding comprising mainly short-term (but with limited duration mismatch between its leasing receivables and debt) and secured financing, moderately volatile profitability and relatively high financial leverage.
The Issuer Rating Outlook reflects our expectation that Lionbridge Capital will continue to grow its truck leasing and loan facilitation businesses while manage the augmented loan portfolio adequately with low delinquency and loss ratios in line with its prior loan portfolio performance. We expect Lionbridge Capital to continue to at least maintain and/or improve its access to both the bank and capital markets for fundings. We also expect the same strong support from CCBT through shareholding and credit lines.