FRANKFURT, July 2 (Reuters) - Chinese credit rating agency Dagong is targeting 5-10 percent of the European market by 2017, seeking to cash in on criticism of the big three ratings agencies after the financial crisis and marry European debt issues with its capital-exporting homeland.
The global market for credit ratings is dominated by Standard & Poor’s, Moody’s and Fitch, but they have come under fire from some investors and politicians for failing to anticipate the 2007-9 crisis.
With talks about setting up a new European credit rating agency having run into the sand, Dagong said on Tuesday it had been well received by regulators, central banks and potential debt issuers in the region as it embarks on expansion there.
“We’ve been warmly welcomed almost everywhere,” said Dagong Europe general manager Mauro Alfonso at a briefing.
“The feeling is that more competition in the marketplace is needed.”
Dagong would take a long term approach, delivering ratings that were more countercyclical than those of the big three agencies, Dagong Global Chairman Guan Jianzhong added.
“It is creditors who should assess the credit risks of debtors, rather than trying to protect the interests of creditors by relying on the credit rating information provided by debtors,” Guan told the briefing.
Dagong is targeting annual revenues of 10 million euros ($13 million) by 2017, Alfonso said, adding he hoped to have at least 60-70 ratings on top European financial and corporate issuers published by then.
Every rating would be agreed with the issuer and there would be no unsolicited ratings, Alfonso said, adding ratings would be visible to everyone to improve transparency.
Sovereign ratings would not be produced in Europe but would remain the purview of Dagong Global in China, the company said.
Dagong Europe was established in April 2012 in Milan by Dagong Global and Mandarin Capital Partners, a Sino-Italian private equity group whose investors include Italy’s largest retail bank, Intesa Sanpaolo.
$1 = 0.7671 euros Reporting by Jonathan Gould; Editing by Mark Potter