PENGYUAN INTERNATIONAL

HONG KONG, 15 Mar 2018. Pengyuan International has released its General Corporate Rating Criteria. For more details, please visit: http://www.pyrating.com/Methodology

These rating criteria describe PENGYUAN’s analytical approach to assess the credit risks  for  all  corporate industrial  companies  and  utilities on  a  global  scale.  Our assessment reflects a corporate entity’s business profile, financial profile and other rating factors that may impact its stand - alone credit profile (SACP). These criteria will also explain in detail on what are the specific rating factors that form our view on a corporate issuer’s business profile and financial profile, which will be combined to derive a company’s indicative credit score (ICS). PENGYUAN intends  to  use these criteria to provide markets and the participants with clarity on our fundamental analysis of a corporate’s credit risks and our ratings that reflect such risks. However, we recognize that  these criteria  cannot  exhaustively  include  all  rating  factors  that are reflected in our ratings, but it should enable readers to gain understanding on what we consider as the most important factors that may impact a corporate issuer’s credit risks.


These criteria apply to the issuer credit ratings (ICR) of all industrial corporates that we consider as nonfinancial issuers globally. However these criteria do not apply to following companies that we believe to have very different risk characteristics and rating structures, which require different methodologies or substantial modifications of  these criteria:  project  finance entities, project  developers,  commodities  trading, investment holding companies, equipment leasing, companies that generate cash flows  and  profits  by trading financial  assets  and  by  investment  gains,  as  well  as other types of companies we may deem inappropriate for this methodology.


PENGYUAN adopts  a  general  corporate  rating criteria framework  to  assess  a corporate issuer’s credit rating, which examines a set of predefined common rating factors  that  apply  to  all  industries  and companies.  We  believe  this  is  the  way  to achieve  maximum  rating  consistency  and  comparability across  different  markets and  industries.  However,  we  also  acknowledge  that different  industries  and countries  often  have  some different and  unique risk  characteristics,  we  strike  the balance between rating comparability and industry difference by complementing this general rating criteria framework with industry-specific criteria such as Industry Risk Analysis Guideline (IRAG). In this criteria report, we first explain how we derive a corporate issuer’s indicative credit score, which then will be combined with three addit ional adjustment factors to achieve an issuer’s stand-alone credit profile. A corporate issuer’s credit  rating is the result of combining this company’s SACP and the possible external supports from either a supporting parent or group, or a government which this company is important to and has close ties with. An issuer’s ICS has two components: business profile that assesses a corporate issuer’s macro environment risk exposure, industry risk  sensitivity, and its operational  strength;  financial  profile  that assesses a corporate issuer’s profitability, financial leverage, debt structure, financial policy and financial volatility.


In addition to an issuer’s indicative credit  score,  three  clearly  defined  adjustment factors  will  be  considered to  modify  its ICS,  which  are corporate  structure  and governance,  liquidity  and supplementary  analysis. These  adjustment  factors  may raise  or  lower  the ICS by  one  or  multiple notches, and supplementary analysis is based on a holistic view of the company’s credit characteristics.


These criteria will be effective immediately on the date of final publication and we intend to complete the review of all affected ratings, if any,within the next six months, and we expect no impact to our current rating portfolio.



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DISCLAIMER
Pengyuan Credit Rating (Hong Kong) Company Ltd (“Pengyuan International”, “Pengyuan”, “the Company”, “we”, “us”, “our”) publishes credit ratings and reports based on the established methodologies and in compliance with threating process. For more information on policies, procedures, and methodologies, please refer to the Company’s website www.pyrating.com. The Company reserves the right to amend, change, remove, publish any information omits website without prior notice and at its sole discretion.
All credit ratings and reports are subject to disclaimers and certain limitations. CREDIT RATINGS ARE NOT FINANCIAL OR INVESTMENT ADVICE ANDMUST NOT BE CONSIDERED AS A RECOMMENDATION TO BUY, SELL OR HOLD ANY SECURITIES AND DO NOT ADDRESS/REFLECT MARKET VALUE OF ANY SECURITIES. USERS OF CREDIT RATINGS ARE EXPECTED TO BE TRAINED FOR INDEPENDENT ASSESSMENT OF INVESTMENT AND BUSINESS DECISIONS. 
CREDIT RATINGS ADDRESS ONLY CREDIT RISK. THE COMPANY DEFINES THE CREDIT RISK AS THE RISK THAT THE RATED ENTITY MAY NOT MEET ITS CONTRACTUAL AND/OR FINANCIAL OBLIGATIONS AS THEY BECOME DUE. CREDIT RATINGS MUST NOT BE CONSIDERED AS FACTS OF A SPECIFIC DEFAULT PROBABILITY OR AS A PREDICTIVE MEASURE OF A DEFAULT PROBABILITY. Credit ratings constitute the Company’s forward-looking opinion of the credit rating committee and include predictions about future events which by definition cannot be validated as facts. 
For the purpose of rating process the Company obtains sufficient quality factual information from sources believed by the Company to be reliable and accurate. The Company does not perform an audit and undertakes no duty of due diligence or third-party verification of any information it uses during threating process. The issuer and its advisors are ultimately responsible for the accuracy of the information provided for threating process.
Users of the Company’s credit ratings should refer to the rating symbols and definitions published on the Company’s website. Credit ratings with the same rating symbol may not fully reflect all small differences in the degrees of risk, because credit ratings are relative measures of the credit risk.
NO WARRANTY, EXPRESS OR IMPLIED, AS TO THE ACCURACY, TIMELINESS OR COMPLETENESS OF ANY INFORMATION GIVEN OR MADE BY THE COMPANY IN ANY FORM OR MANNER. In no event shall the Company, its directors, shareholders, employees, representatives be liable to any party for any damages, expenses, fees, or losses in connection with any use of the information published by the Company.
The Company reserves the right to take any rating action for any reasons the Company deems sufficient at any time and in its sole discretion. The publication and maintenance of credit ratings are subject to availability of sufficient information.
The Company may receive compensation for its credit ratings, normally from issuers, underwriters or obligors. The information about the Company’s fee schedule can be provided upon the request.
The Company reserves the right to disseminate its credit ratings and reports through its website, the Company’s social media pages and authorized third parties. No content published by the Company may be modified, reproduced, transferred, distributed or reverse engineered in any form by any means without the prior written consent of the Company. 
The Company’s credit ratings and reports are not indented for distribution to, or use by, any person in a jurisdiction where such usage would infringe the law. If in doubt, please consult the relevant regulatory body or professional advisor to ensure compliance with applicable laws and regulations.
 
Copyright ? 2018 by Pengyuan Credit Rating (Hong Kong) Company Ltd. All rights reserved.


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