PENGYUAN Credit Rating (Hong Kong) is building a new team analyzing the credit worthiness of companies looking to sell offshore bonds, the latest Chinese ratings firm to expand overseas and take advantage of the booming Asian dollar bond market.

The Hong Kong-based unit of Shenzhen’s Pengyuan Credit Rating has hired 11 people since the start of October, according to Jonathan Hu, Pengyuan’s CEO. The team is comprised of four sector heads, including a former People’s Bank of China official, six junior analysts and one chief analytical officer.

Among them is Liang Zhong, a former section head at China’s central bank’s international department, who is heading up Pengyuan’s sovereign and public finance ratings team. Three other senior analysts who joined from international rating agencies are leading Pengyuan’s financial institutions, corporate and structured finance ratings, respectively.

Pengyuan joins Dagong Global Credit Rating in broadening the scope of its research offerings, targeting mainland companies issuing dollar bonds in the first step of its expansion.

A record US$322 billion was issued in Asia’s dollar bond market last year and many expect an even greater value of sales in 2018, leaving a strong appetite for quality research among the borrowers.

Chinese companies comprised more than half of the issuers since 2015.

China’s central bank last year allowed foreign companies access to its domestic interbank bond market to compile and issue ratings, the latest step in a series of measures to open up its financial system that included the bond connect program.

While international peers are still reviewing the regulator’s new rules of conducting business onshore, Pengyuan expects any gain in market share to take time.

“Gaining investors’ vote of confidence is the main goal for us this year,” said Hu. “We don’t want to set a timeline on publishing the first rating report. You can’t build a credit rating agency in a day.”

The firm will also look to rate yuan-denominated dim sum and Panda bond issuers and may eventually expand globally, said Hu.

Chinese rating firms were criticized by the nation’s biggest bond clearing house last year for giving scores on some onshore corporate notes that were “overrated,” adding that local firms were seriously late in adjusting ratings. (SD-Agencies)