Core Insights - The credit rating agencies in China's bond market are facing challenges as the volume of bond ratings and issuer ratings has decreased, indicating a need for improvement in governance and internal control mechanisms [1][5][6] Group 1: Market Overview - As of the end of Q1, there are 5,625 issuers of corporate credit bonds and financial bonds in China's bond market, with non-financial corporate debt financing tools, corporate bonds, and financial bond issuers numbering 3,065, 4,189, and 505 respectively [2] - The proportion of AA-rated issuers is 25.51%, 38.74%, and 9.31% for different categories, while AAA-rated issuers account for 97.11% of local government bonds [2] Group 2: Rating Agency Performance - In Q1, 15 rating agencies undertook 2,609 bond products, a decrease of 4.92% quarter-on-quarter, and 2,200 issuer ratings, down 21.06% [2] - The leading agencies by market share are China Chengxin International and United Ratings, with shares of 33.92% and 20.9% respectively [2] Group 3: Rating Adjustments - A total of 19 rating adjustments were made for 15 issuers in Q1, a decrease of 36% from the previous quarter, with 8 positive adjustments and 7 negative adjustments [3] - The inconsistency rate among issuers rated by multiple agencies is 7.1%, which has increased by 0.68 percentage points [3] Group 4: Analyst Workforce - The total number of analysts in the 15 rating agencies has decreased to 1,633, with a year-on-year decline of 89 [5] - Analysts with over three years of experience account for 76.24%, an increase of 11.08 percentage points year-on-year [5] Group 5: Regulatory Environment - Regulatory bodies are enhancing supervision and self-regulation within the credit rating industry, aiming to develop a rating system that aligns with China's unique circumstances [5][6] - New opportunities are emerging, particularly with the introduction of technology innovation bonds, which require a tailored credit rating approach [6]

Group 1 - As of March 31, 2025, there are 5,625 issuers of corporate credit bonds and financial bonds in the interbank market, with 3,065 non-financial corporate debt financing tools, 4,189 corporate bonds, and 505 financial bond issuers [1] - The distribution of issuer ratings shows that AA-rated issuers account for 25.51%, 38.74%, and 9.31% respectively, while issuers rated AA+ and above account for 70.54%, 51.47%, and 65.35% [1] - There are 12,266 outstanding local government bonds, with AAA-rated bonds making up 97.11%, and 9,684 asset-backed securities with 44.53% rated AA and above [1] Group 2 - In the first quarter, 15 rating agencies collectively undertook 2,609 bond products, a decrease of 4.92% quarter-on-quarter, and 2,200 issuer ratings, down 21.06% [2] - The leading agencies by business volume are China Chengxin International and United Ratings, with market shares of 33.92% and 20.9% respectively [2] Group 3 - There were 19 rating adjustments made by rating agencies in the first quarter, a decrease of 36% quarter-on-quarter, with 8 positive adjustments and 7 negative adjustments [3] - China Chengxin International made the most positive adjustments, raising the ratings of 4 issuers, while Zhongceng Pengyuan had the most negative adjustments, lowering the ratings of 4 issuers [3] Group 4 - In the first quarter, 114 issuers changed their rating agencies, a decrease of 22 year-on-year and 60 quarter-on-quarter, with an upgrade rate of 7.02% for those whose new agency provided a higher rating [4] - Standard & Poor's (China) upgraded 4 issuers, representing 100% of its new agency assignments [4] Group 5 - As of March 31, 2025, there are 902 issuers with ratings from two or more agencies, representing 17.22% of outstanding bond issuers, with a discrepancy rate of 7.10% [5] - The discrepancies in ratings are all within one sub-level, with China Chengxin International rating 11 issuers higher than others, accounting for 2.14% [5]