An­bang Down­graded

Beijing Review - - This Week -

Dagong Global Credit Rat­ing Co. Ltd. an­nounced on Au­gust 23 the is­suer credit rat­ing of An­bang Life In­sur­ance Co. Ltd. would be down­graded to AA+ from AAA, with a neg­a­tive out­look, and the bond is­sue rat­ing of “15 An­bang Life In­sur­ance” to AA from AAA.

The debt re­pay­ment en­vi­ron­ment of An­bang Life In­sur­ance is un­der pres­sure, re­sult­ing in de­te­ri­o­ra­tion of both its wealth cre­ation abil­ity and debt re­pay­ment sources. With the sup­port­ing con­di­tions for its debt re­pay­ment abil­ity weak­ened, An­bang Life In­sur­ance’s credit sta­tus is in de­cline, ac­cord­ing to a state­ment from Dagong.

In the state­ment, it lists the pri­mary rea­sons for down­grad­ing the is­suer credit rat­ing of An­bang Life In­sur­ance.

Mea­sures have been in­tro­duced suc­ces­sively to high­light the at­ten­tion and ur­gency for fi­nan­cial risk con­trol at the pol­icy level, to­ward strength­en­ing in­sur­ance reg­u­la­tions, crack­ing down on il­le­gal and ir­reg­u­lar busi­ness ac­tiv­i­ties, and re­dress­ing mar­ket dis­or­der. As a re­sult, life in­sur­ance prod­ucts with a short- and medium-term du­ra­tion and fi­nanc­ing char­ac­ter­is­tics are un­der more rig­or­ous con­trol.

In the mean­time, dif­fi­cul­ties re­main for al­lo­cat­ing in­vest­ment as­sets in the cap­i­tal mar­ket. An­bang sur­prised the in­sur­ance sec­tor in China with its rapid ex­pan­sion and merg­ers in re­cent years. But An­bang’s ex­ist­ing busi­ness model is con­fronted with ma­jor chal­lenges. As un­fa­vor­able fac­tors con­tinue to af­fect its debt re­pay­ment sources, risk of fur­ther de­cline in credit sta­tus in the fu­ture still ex­ists.

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