News & Events
August 1, 2019 - “2019 Renminbi Bonds of Cassa depositi e prestiti S.p.A. (Series 1)” was successfully issued today. The rating service is provided by China Chengxin International Credit Rating Co., Ltd. (“CCXI”). Therefore, Cassa depositi e prestiti S.p.A. (the “CDP”) becomes the first Italian issuer, as well as the first European National Promotional Institution (“NPI”) in the Panda Bond market.
In March 2019, the Republic of Italy signed an MoU with the People’s Republic of China on the "Belt and Road Initiative" (“BRI”), becoming the first G7 country to join the BRI. On July 10, at the first Sino-Italian Finance Ministers’ dialogue, the two sides welcomed the idea of Italian eligible financial institutions issuing Panda Bonds. CDP’s successful issuance of the Panda Bonds is an iconic event of deep cooperation between China and Italy in the Panda Bond market.
CDP, established in 1850, is the only NPI in Italy recognized by the Italian Government and the European Union, aiming to promote the medium/long-term development of Italian economy. CDP is the entry point for funding under the Juncker Plan in Italy and its investments mainly distributed to public entities, infrastructure, industrial enterprises and strategic assets. The CDP Group has total assets of more than EUR400 billion and net profit of more than EUR4 billion, which is one of the largest institutions in Italy ranked by assets.
CCXI assigns a local scale credit rating of AAA to CDP with a rating outlook of stable, and a credit rating of AAA to the “2019 Renminbi Bonds of Cassa depositi e prestiti S.p.A. (Series 1)”. In the opinion of CCXI, CDP enjoys very high support from the Italian government thanks to its strategic position as a NPI to promote the medium/long-term development of Italian economy, and having the Ministry of the Economic and Finance as its controlling shareholder. With main investment targets on Italian public entities and large-scale enterprises, CDP has high asset quality. CDP has postal funding as its primary and stable funding source, and it also has access to diversified financing channels and liquidity support provided by the ECB and Bank of Italy.
Meanwhile, CCXI recognizes that CDP has a relatively high exposure to Italian government bonds, of which the price fluctuation can have an impact on CDP’s balance sheet. CDP’s long-term equity investment accounts for a large portion of its assets and is concentrated in the domestic market. Therefore, CDP’s profits are subject to fluctuations of both Italy's macro-economy and its investment portfolios.
As an important observer and participant in the Panda Bond market, CCXI has so far undertaken ratings of more than 60% of publicly issued Panda Bonds. CCXI assigned ratings to the first sovereign Panda Bonds-Republic of Korea, the first multinational institution green Panda Bonds-New Development Bank and the first “Bond Connect” Panda Bonds-Malayan Banking Berhad, etc. In 2016, CCXI, together with ASIFMA, King & Wood Mallesons and Standard Chartered Bank, released the first special report on Panda Bonds, namely, RMB Series: Panda Bonds – On the Cusp. CCXI has also released Panda Bond Market Review and Outlook for three consecutive years. In the future, CCXI will continue to promote the healthy development of the Panda Bond market with professional rating and research services.