Hong Kong, December 17, 2021 -- Moody's Investors Service has affirmed the A1/P-1 long-term/short-term
local and foreign currency issuer rating of Agricultural Development Bank
of China (ADBC).
The entity-level outlook on ADBC remains stable, in line
with the outlook on the issuer rating of the Chinese government,
reflecting Moody's view that the very close links between the bank's
credit quality and that of the government will remain broadly unchanged
over the next 12-18 months. At the same time, Moody's
has withdrawn outlooks on the ratings of long-term local and foreign
currency issuer ratings of ADBC. It is Moody's current practice
not to assign instrument level outlooks for financial entities other than
those rated under the Banks Methodology.
A list of all affected ratings and assessments is at the end of this press
release.
RATINGS RATIONALE
ADBC's A1 issuer rating is in line with the senior unsecured debt
rating of the Government of China (A1 stable). The very close links
between the bank's credit quality and that of the government underpin
its rating.
China's State Council has assigned ADBC a policy finance role of supporting
economic growth and structural adjustments in the agricultural sector,
implying a prolonged alignment of interests and objectives between the
bank and the government. In July 2017, the State Council
amended the bank's Articles of Association, reaffirming ADBC
as a policy bank and its issued bonds as policy financial bonds,
with the government pledging credit support.
The government fully owns ADBC through the Ministry of Finance.
As a development bank under the leadership of the State Council,
ADBC has no share capital listed. No entity other than the government
has or can obtain a direct or indirect ownership interest or equity participation
in the bank.
ADBC functions under the strong control and directives of the government,
with its operations and finances inextricably intertwined with those of
the government.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Moody's could upgrade ADBC's rating if the Chinese government's
senior unsecured debt rating is upgraded; and if support to the bank
remains a government priority, despite the bank's ongoing
reforms.
Conversely, Moody's could downgrade ADBC's rating if the Chinese
government's senior unsecured debt rating is downgraded; changes
in the bank's policy role diminish its strategic importance to the government;
or if the government substantially reduces its ownership in the bank.
PRINCIPAL METHODOLOGY
The principal methodology used in these ratings was Government-Related
Issuers Methodology published in February 2020 and available at https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_1186207.
Alternatively, please see the Rating Methodologies page on www.moodys.com
for a copy of this methodology.
Established in 1994, Agricultural Development Bank of China (ADBC)
is a policy bank wholly owned by the government. Headquartered
in Beijing, the bank reported total assets of RMB7,460.2
billion and total equity of RMB193.5 billion as of the end of 2020.
LIST OF AFFECTED RATINGS
Long-term local and foreign currency issuer rating affirmed
at A1, outlook withdrawn, previously stable
Short-term local and foreign currency issuer rating affirmed
at P-1
Entity-level outlook remains stable
The local market analyst for these ratings is Nicholas Zhu, +86
(10) 6319-6536.
REGULATORY DISCLOSURES
For further specification of Moody's key rating assumptions and sensitivity
analysis, see the sections Methodology Assumptions and Sensitivity
to Assumptions in the disclosure form. Moody's Rating Symbols and
Definitions can be found at: https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_79004.
For ratings issued on a program, series, category/class of
debt or security this announcement provides certain regulatory disclosures
in relation to each rating of a subsequently issued bond or note of the
same series, category/class of debt, security or pursuant
to a program for which the ratings are derived exclusively from existing
ratings in accordance with Moody's rating practices. For ratings
issued on a support provider, this announcement provides certain
regulatory disclosures in relation to the credit rating action on the
support provider and in relation to each particular credit rating action
for securities that derive their credit ratings from the support provider's
credit rating. For provisional ratings, this announcement
provides certain regulatory disclosures in relation to the provisional
rating assigned, and in relation to a definitive rating that may
be assigned subsequent to the final issuance of the debt, in each
case where the transaction structure and terms have not changed prior
to the assignment of the definitive rating in a manner that would have
affected the rating. For further information please see the ratings
tab on the issuer/entity page for the respective issuer on www.moodys.com.
For any affected securities or rated entities receiving direct credit
support from the primary entity(ies) of this credit rating action,
and whose ratings may change as a result of this credit rating action,
the associated regulatory disclosures will be those of the guarantor entity.
Exceptions to this approach exist for the following disclosures,
if applicable to jurisdiction: Ancillary Services, Disclosure
to rated entity, Disclosure from rated entity.
The ratings have been disclosed to the rated entity or its designated
agent(s) and issued with no amendment resulting from that disclosure.
These ratings are solicited. Please refer to Moody's Policy for
Designating and Assigning Unsolicited Credit Ratings available on its
website www.moodys.com.
Moody's considers a rated entity or its agent(s) to be participating when
it maintains an overall relationship with Moody's. Unless noted
in the Regulatory Disclosures as a Non-Participating Entity,
the rated entity is participating and the rated entity or its agent(s)
generally provides Moody's with information for the purposes of its ratings
process. Please refer to www.moodys.com for the Regulatory
Disclosures for each credit rating action under the ratings tab on the
issuer/entity page and for details of Moody's Policy for Designating Non-Participating
Rated Entities.
Regulatory disclosures contained in this press release apply to the credit
rating and, if applicable, the related rating outlook or rating
review.
Moody's general principles for assessing environmental, social and
governance (ESG) risks in our credit analysis can be found at http://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_1288235.
The Global Scale Credit Rating on this Credit Rating Announcement was
issued by one of Moody's affiliates outside the EU and is endorsed by
Moody's Deutschland GmbH, An der Welle 5, Frankfurt am Main
60322, Germany, in accordance with Art.4 paragraph
3 of the Regulation (EC) No 1060/2009 on Credit Rating Agencies.
Further information on the EU endorsement status and on the Moody's office
that issued the credit rating is available on www.moodys.com.
The Global Scale Credit Rating on this Credit Rating Announcement was
issued by one of Moody's affiliates outside the UK and is endorsed by
Moody's Investors Service Limited, One Canada Square, Canary
Wharf, London E14 5FA under the law applicable to credit rating
agencies in the UK. Further information on the UK endorsement status
and on the Moody's office that issued the credit rating is available on
www.moodys.com.
Please see www.moodys.com for any updates on changes to
the lead rating analyst and to the Moody's legal entity that has issued
the rating.
Please see the ratings tab on the issuer/entity page on www.moodys.com
for additional regulatory disclosures for each credit rating.
The first name below is the lead rating analyst for this Credit Rating
and the last name below is the person primarily responsible for approving
this Credit Rating.
David Jinhua Yin
VP - Senior Credit Officer
Financial Institutions Group
Moody's Investors Service Hong Kong Ltd.
24/F One Pacific Place
88 Queensway
Hong Kong
China (Hong Kong S.A.R.)
JOURNALISTS: 852 3758 1350
Client Service: 852 3551 3077
Chen Huang
Associate Managing Director
Financial Institutions Group
JOURNALISTS: 852 3758 1350
Client Service: 852 3551 3077
Releasing Office:
Moody's Investors Service Hong Kong Ltd.
24/F One Pacific Place
88 Queensway
Hong Kong
China (Hong Kong S.A.R.)
JOURNALISTS: 852 3758 1350
Client Service: 852 3551 3077
