Nowadays there are more than 8,000 issuers with total outstanding amount of nearly 83 trillion yuan in China’s bond market. 83% of the issuers are rated at AA or above, representing 98% of the total outstanding debt balance. Since the first default case in 2014, the number and the outstanding balance of defaulted bonds have increased for consecutive years and have reached a historic high in 2018. From January to October 2018 the total amount of defaulted bonds has reached almost 76.2 billion yuan, equivalent to the collective amount of defaulted bonds from 2014 to 2017. Institutional investors are facing significant challenges in making bond investments, and to avoid high-risk assets and to find suitable investment targets has become their primary need.
For institutional investors there commonly exist a number of pain points, such as lack of granularity within the public ratings, difficulty in achieving an alpha by distinguishing superior targets with better risk-reward profiles, and difference in risk preferences among various financial institutions. At present, the internal evaluation systems of most investment institutions are still at the stage of single bond analysis, which relies on scattered data and analysts’ personal experiences to draw conclusions, without any support from structured data analytics, systematic credit evaluation methods or large-scale credit rating coverage. As a result these institutions are in urgent need of a tailor-made, systematic internal rating system based on their own risk preferences to identify risks and select investment targets.
As such, CreditMaster provides a data-driven solution of bond credit analysis and evaluation. With the comprehensive suite of structured credit-related data as the fundamental, the entirety of public data in the markets as the statistic base and the technology as the driving force, CreditMaster fully covers the Chinese public offering bond market, and helps investors to achieve accurate and efficient credit analysis to grasp the investment opportunities and gain insights into risks and create investment value.