Chinese corporates are increasingly providing keepwell and equity interest purchase undertaking deeds – in place of guarantees – in their offshore borrowing, reports Fitch Ratings. As these structures are still evolving, the credit ratings agency (CRA) evaluates the effect of these deeds to the overall debt structure on a case-by-case basis.
In its report, entitled
‘Subordination of Chinese Offshore Debt Issues’
, Fitch says it considers, in its recovery analysis, offshore debt as subordinated to all onshore debt for repayment, barring instances where there are guarantees from onshore operating entities. The CRA uses recovery analysis to determine whether to notch the ratings of offshore debt from the issuer’s issuer default rating (IDR).
Despite structural subordination, there have been few instances requiring Fitch to notch down offshore debt from the company’s IDR. This is due to relatively low financial leverage among rated Chinese corporates. This does not imply, however, that offshore creditors should necessarily expect full recovery in the event of default.
With the end of 2017 fast approaching, many finance professionals might be counting down the days with some degree of dread. Year End is just around the corner and with it comes the many long hours accountants will spend going over balance sheets and profit and loss accounts, investigating account irregularities and chasing sign offs.
The top five sectors Asian fintech investors are interested in are data analytics, blockchain, lending, payments and regtech, according to Gary Hwa, EY regional managing partner.
On the third day of the Singapore Fintech Festival conference, there was a focus on specific applications of fintech innovation. One was trade finance, which is clearly is ripe for a revolution.
Kicking off day two of the Singapore Fintech Festival, Deloitte Chairman David Cruikshank said that fintech is significant for three reasons. First, customer expectations of services are higher than ever. Second, barriers to entry are lower than before. And finally, financial institutions (FIs) face a threat of what a competitor might do.