HONG KONG, 19 December 2022. Pengyuan International (PENGYUAN) has today published a request for comments on the Environmental, Social and Governance (ESG) Impact on Credit Rating.
PENGYUAN would appreciate comments on these criteria from investors and other market participants. The request-for-comment version of the criteria and analyst contact are available via the “Preview” and “Download” button on this page.
The awareness of ESG factors and how they may affect issuers’ and their products’ credit profile has significantly increased globally. When carrying out credit analyses, PENGYUAN also examines both ESG risks and opportunities that might influence the final rating. In this criteria article, we list the key ESG factors and metrics that we consider and explain how these factors are applied in our various rating criteria.
PENGYUAN considers ESG factors, both on a quantitative and qualitative basis, when performing credit analysis based on our published rating criteria across all sectors and products. These factors may affect ratings and rating outlooks, with a downward bias in general. This is because ESG factors may affect an issuer’s cash flow and hence impact its capability to fulfill its financial obligations. On the other hand, a strong ESG positioning may not necessarily enhance an issuer’s financial profile.
RATING SERVICES ENQUIRIES
Vincent Ha, CFA
+852 3615 8307
Ke Chen, PhD
+852 3615 8316
Ke Chen, PhD
+852 3615 8316
Additional information is available on www.pyrating.com
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 the rating 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 on its website without prior notice and at its sole discretion.
All credit ratings and reports are subject to disclaimers and limitations. CREDIT RATINGS ARE NOT FINANCIAL OR INVESTMENT ADVICE AND MUST 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 the rating process, the Company obtains sufficient quality factual information from sources which are 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 the rating process. The issuer and its advisors are ultimately responsible for the accuracy of the information provided for the rating process.
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