Coverage

  • General Corporate

  • Chinese Property Developer

  • China Local Government Financing Vehicle (“LGFV”)

  • Banks

  • Non-Bank Financial Institutions

  • Structured Finance

 

General Corporate Rating Criteria

Our criteria report comprises three segments: (1) operating environment of the country in which a corporate entity is domiciled, (2) industry analysis in which the corporate entity conducts its business, and (3) corporate entity analysis which comprises (a) qualitative business and (b) quantitative financial analysis. We take a holistic view on a corporate entity balancing all-around political, economic, industrial, operational, and financial factors.

Chinese Property Developer Rating Criteria

Our criteria report comprises three segments: (1) operating environment of China, (2) industry analysis, and (3) corporate analysis which comprises (a) qualitative business and (b) quantitative financial analysis. We take a holistic view on a Chinese property developer balancing all-around political, economic, industrial, operational, and financial factors.

China Local Government Financing Vehicle (“LGFV”) Rating Criteria

Our criteria report explains Lianhe Global’s general approach to assessing an LGFV’s credit profile by combining the likelihood and degree of local government support that the LGFV will receive to sustain the LGFV’s viability and sustainability, along with the standalone credit profile of the LGFV. We incorporate the availability of local government support into the assessment of an LGFV’s standalone credit strength to assign a credit rating to the LGFV. The credit rating represents our opinion on the issuer’s relative capability to meet its financial obligations (usually senior obligations) as they come due. It acts as an anchor from which all other issuer and issuance ratings for the issuer are derived and is comparable across various industries.

Banking Rating Criteria

Our criteria report explains Lianhe Global’s general approach to assessing a bank’s standalone credit profile and the likelihood of external support that the entity will receive in case of need, i.e. to sustain a bank’s viability. We incorporate the availability of external support into the assessment of the bank’s standalone credit strength to assign a credit rating to the bank.

Non-Bank Financial Institutions Rating Criteria

The criteria report explains Lianhe Global’s general approach to assessing a non-bank financial institution’s standalone credit profile and the likelihood of external support that the entity will receive in case of need, i.e. to sustain the institution’s viability. We incorporate the availability of external support into the assessment of a non-bank financial institution’s standalone credit strength to assign a credit rating to the entity.

The most common form of support for a non-bank financial institution is the institutional support from the entity’s parent. Government support is not common for most non-bank financial institutions given the lack of systemic importance, although this may be available for an institution with a policy role.

Structured Finance Criteria

Lianhe Ratings Global Limited (“Lianhe Global”) applies this structured finance criteria to transactions backed by assets including, but not limited to, consumer loan receivables, residential & commercial mortgage loans, trade receivables, corporate loans, as well as synthetic securitisations. The criteria outline and describe the rating process and procedure we undertake to evaluate both qualitative and quantitative factors when assigning ratings to structured finance transactions. The criteria are meant to provide a general guidance and shall not be interpreted as a rigid step-by-step methodology. We may make reasonable adjustments to reflect the unique features of each transaction. Furthermore, the criteria do not represent a comprehensive methodology but only address key rating factors.