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Rating Action: Toyota Glory 2021 Phase II Retail Auto Loan Credit Asset-backed Securities Senior Notes Assigned AAAspc(sf) Preliminary Ratings

Express Delivery Industry: Financial Risk is Increasing

Issue Rating Notice: Crédit Agricole S.A. 2021 Renminbi Bonds (Series 2) to be Rated “AAAspc”



Rating Action: Toyota Glory 2021 Phase II Retail Auto Loan Credit Asset-backed Securities Senior Notes Assigned AAAspc(sf) Preliminary Ratings

BEIJING, July 29, 2021- S&P Global (China) Ratings has assigned its preliminary rating AAAspc(sf) to the Toyota Glory 2021 Phase II Retail Auto Loan Credit Asset-backed Securities (Toyota Glory 2021-2) Class A notes to be issued by China Foreign Economy and Trade Trust Co. The notes are backed by auto loans that were originated by Toyota Motor Finance (China) Company Limited (TMF).


We assigned the preliminary ratings based on information as of July 16, 2021. We expect to assign and publish our final ratings when the trust becomes effective.


The preliminary ratings reflect our analysis of five pillars under S&P Ratings China--Structured Finance Methodology.


Credit Quality of the Securitized Assets: We analyzed the originator's operational framework, risk management and track record, historical static and dynamic pool data, aggregated and securitized assets, and other qualitative and quantitative factors to derive our base-case assumptions which are further refined by forward-looking considerations. We have formed a base-case assumption of a default rate of 1.10% and recovery rate of 15.00%. After applying the specific stress multiple and recovery haircut, the stressed default and recovery rates are 5.50% and 7.50% respectively under our AAAspc(sf) rating stress scenario.


Payment Structure and Cash Flow Mechanics: We model various combinations under default timing assumptions, prepayment rate assumptions, different triggers and payment structures, tax, fees and expenses assumptions. The Class A notes are expected to be able to withstand stresses commensurate with the ratings assigned to the notes, and still meet payment obligations in a timely manner. We estimated the final S&P Global (China) Ratings CE buffer to be greater than 4%.


Operational and Administrative Risk: The transaction’s direct debit payment mechanism will reduce TMF’s operational risk to some extent. Although there is no back-up servicer, the liquidity reserve account can provide liquidity support to the transaction. We believe the participants in this transaction are capable of fulfilling the duties and responsibilities stipulated in the agreement given their experience and past track record.


Counterparty Risk: Our assessment of counterparty risk takes into account payment interruption risk, account bank risk, commingling risk and set off risk etc. The transaction documents have incorporated various credit quality triggers to mitigate the abovementioned counterparty risk.


Legal and Regulatory Risk: This transaction is structured in accordance with China's Trust Law and China Asset Securitization scheme. We believe the legal structure of the special purpose trust (SPT) meets the principle of true sale and bankruptcy remoteness in securitization. Through our legal analysis, the borrower notification, collateral re-registration and other legal risks have been mitigated by the arrangements stipulated in the transaction documents. 


List of Preliminary Ratings:

Class A: AAAspc(sf)


Methodology Applied:

S&P Ratings China--Structured Finance Methodology


Related Research:

Commentary: Understanding Our Approach to China Consumer Asset-Backed Securities

The Road to Recovery: China Corporate Mid-Year Outlook 2021

The Journey Ahead: A Look At China’s Auto ABS Sector 2021 Edition


Models Applied:


SPG China Ratings Structured Finance Cash Flow Engine


Media Contacts:

Sharon Tang, Beijing, (86)10-6569-2988; sharon.tang@spgchinaratings.cn


Analyst Contacts:

Beibei Shi, Beijing;     beibei.shi@spgchinaratings.cn

Jiarong Li, Beijing;     jiarong.li@spgchinaratings.cn

Siyue Zhu, Beijing; april.zhu@spgchinaratings.cn

Express Delivery Industry: Financial Risk is Increasing

In our view, overall financial risk in the express delivery industry is significantly higher in 2021 as a fierce price war eats away at profitability. As this race to the bottom continues with no end in sight, players would struggle to resolve the dilemma through raising prices.
We highlight two types of risk in this situation: firstly, where gross profit per delivery comes close to or even drops below zero, leading to a significant decline in cash flow to debt coverage; secondly, where demand for capital expenditure reaches a large enough level that debt pressure may increase significantly.

Click the link below to read more.

Issue Rating Notice: Crédit Agricole S.A. 2021 Renminbi Bonds (Series 2) to be Rated “AAAspc”

 On September 7, 2021, S&P Global (China) Ratings assigned its “AAAspc” issue rating to Crédit Agricole S.A. 2021 Renminbi Bonds (Series 2). Linked is the full Issue Rating Notice.



Click here to view the English version. 


  • 我们认为,得益于地方政府较大的潜在支持力度,样本中的城市轨道交通企业的潜在主体信用质量较好,在工商企业各行业里位居前列。
  • 我们认为,样本中的城市轨道交通企业的业务状况主要由其所在城市的经济发达程度、居民对城市轨道交通出行依赖程度和运营里程长度等因素决定,不同城市的样本企业表现存在差异。
  • 我们发现,样本中的城市轨道交通企业的财务风险普遍偏高,投资规模大且回报周期长,公益属性强导致盈利水平偏低,对其他业务和政府补助较为依赖,但再融资风险不高。
  • 我们认为,样本中的城市轨道交通企业对地方政府的潜在重要性普遍很高,其潜在主体信用质量往往受地方政府的潜在支持能力影响较大。