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BIZCHINA / Overseas Investment

Moody acquires significant stake in China's top rating agency

(Xinhua)
Updated: 2006-09-30 15:00

The Chinese government has approved the purchase by international rating
agency Moody of a significant stake in China Cheng Xin International
(CCXI), the mainland's largest rating agency.

People familiar with the deal told Xinhua Moody will set aside ten
million U.S. dollars for a 49-percent stake -- the current upper limit
set by the government -- in a joint venture with the CCXI.

The transaction marks the first acquisition in the financial sector
following a regulation issued by the Ministry of Commerce in earlier
August aimed at standardizing foreign acquisition of domestic assets.

"With the rapid development of China's capital market, the domestic
rating business is bound to open wider to the outside considering its
critical status in the capital market," said Mao Zhenhua, chairman of
CCXI.

The new joint venture would focus on ratings for short-term and long-term
financing bonds and some other financial products, as well as commercial
banks and insurers in China, said Ye Min, chief executive officer of the
joint venture.

Moody, founded in 1900, makes assessments that are recognized worldwide.

CCXI, the first mainland rating agency approved by the People's Bank of
China in 1992, is the largest and most influential rating company on the
Chinese mainland.

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