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My internship experience as an analyst assistant at China Bond Rating

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Tianyi WANG

In this article, Tianyi WANG (ESSEC Business School, Global Bachelor in Business Administration (GBBA), 2022-2026) shares her professional experience as an Analyst Assistant at China Bond Rating in Beijing.

About the company

China Bond Rating Co., Ltd. (CBR), established in 2010 with a registered capital of RMB 50 million, has grown into one of the core credit rating institutions in China’s fixed-income market. The company employs around 280 professionals and operates under an “investors-pay” model designed to enhance its independence and objectivity. Over the years, it has built a comprehensive analytical framework covering macroeconomic research, sectoral risk evaluation, credit modelling, structured finance, and green finance.

Logo of China Bond Rating .
Logo of China Bond Rating
Source: the company.

CBR provides a wide range of services including issuer credit ratings, bond and ABS credit assessments, credit-risk-based valuation models, market pricing services, and risk monitoring tools. Its clients span local governments, state-owned enterprises, financial institutions, corporates across industries, and institutional investors in the interbank bond market. According to regulatory disclosures, the company issued over 1,180 new credit ratings in a recent year, covering more than RMB 34 trillion in bond issuance. These credit opinions are widely used for investment decisions, regulatory compliance, and bond pricing, making the firm a key contributor to transparency and information efficiency in China’s fixed-income ecosystem.

As part of its methodology, China Bond Rating uses a structured rating grid similar to international rating agencies, ranging from high-grade ratings (AAA, AA, A) to speculative-grade categories (BBB, BB, B, etc.). Credit ratings help investors assess default risk, determine appropriate yield spreads, and monitor changes in an issuer’s financial strength over time.

Grid of China Bond Rating.
Grid of China Bond Rating
Source: the company.

My internship

From August to November 2023, I worked as an Analyst Assistant at the Investment Service Department. The experience allowed me to gain deep exposure to China’s local government financing system and understand how professional credit evaluations are produced from both data and policy perspectives.

My missions

My primary mission was to support the team in building and maintaining credit evaluation databases for local governments and urban investment enterprises. I conducted detailed research on more than 130 companies across the Sichuan and Chongqing regions, analyzing their business structures, investment pipelines, guarantee arrangements, and key financial items. I helped calculate funding gaps and conducted preliminary assessments of repayment risk.

I also created and updated database templates using Excel, SQL, and internal analytical tools to maintain credit evaluation data for local governments, urban investment enterprises, and bond issuance activities. This included compiling statistics on local government bonds and special refinancing bond issuances.

Another major part of my mission was to verify and cross-check corporate operational and financial data to support fundamental research. I helped review over 60 debt financing reports and credit analysis documents, ensuring accuracy and consistency across key metrics. Through this work, I learned how rating agencies ensure data reliability before forming credit opinions.

Required skills and knowledge

This internship required strong analytical thinking, attention to detail, and the ability to manage large volumes of financial data. Hard skills such as Excel modeling, SQL queries, statistical analysis, and familiarity with financial statements were essential. Equally important were soft skills such as communication, logical reasoning, and the ability to organize information from inconsistent disclosures.

Given the diversity of local government financing practices across regions, I needed to quickly understand differences in fiscal structures, reporting standards, and project pipelines. The role required not only technical ability but also a policy-oriented mindset to interpret the implications of debt levels, off-balance-sheet risks, and industry trends.

What I learned

Through the database reconstruction and indicator standardization work, I gained a systematic understanding of credit risk assessment and the financial mechanisms behind China’s local government financing vehicles (LGFVs). I developed the ability to assess repayment capacity based on funding gaps, cash flow projections, and guarantee relationships.

My contribution helped improve the efficiency of data extraction and cross-validation, significantly reducing the time required for report preparation. During the internship, I also discovered several enterprises exhibiting liquidity pressure and implicit debt risks. These findings supported the final credit rating conclusions.

Overall, this internship strengthened my skills in data management, logical analysis, and risk identification. It also deepened my understanding of how rating agencies support bond market stability through standardized evaluation and high-quality information disclosure.

Financial concepts related to my internship

I present below three financial concepts related to my internship: credit risk assessment, local government implicit debt, and refinancing pressure.

Credit risk assessment

Credit risk assessment is the foundation of the bond market. My work involved analyzing financial ratios, debt structures, liquidity indicators, and funding gaps to determine whether an issuer has adequate repayment capacity. These assessments directly influence credit rating outcomes and bond pricing.

Local government implicit debt

Urban investment companies often carry implicit debt obligations on behalf of local governments. Understanding the link between fiscal revenues, government guarantees, and off-balance-sheet debt was crucial to evaluating the financial sustainability of LGFVs.

Refinancing and liquidity pressure

Many LGFV issuers face refinancing pressure as their short-term borrowings accumulate. By tracking debt maturities and analyzing cash flow projections, I learned how rating agencies evaluate the risk of default and identify early signals of liquidity stress.

Why should I be interested in this post?

This post is relevant for students interested in fixed-income research, credit analysis, bond markets, or public finance in China. Working in a rating agency provides exposure to the fundamentals behind bond pricing, the interaction between public policy and financial markets, and the analytical rigor required to evaluate complex debt structures.

Related posts on the SimTrade blog

Professional experiences

   ▶ All posts about Professional experiences

   ▶ Snehasish CHINARA My Apprenticeship Experience as Customer Finance & Credit Risk Analyst at Airbus

   ▶ Samia DARMELLAH My Experience as a Credit Risk Portfolio Analyst at Société Générale Private Banking

   ▶ Matthieu MENAGER My professional experience as a credit analyst at Targobank

   ▶ Aamey MEHTA My experience as a credit analyst at Wells Fargo

   ▶ Jayati WALIA My experience as a credit analyst at Amundi Asset Management

Financial techniques

   ▶ Jayati WALIA Credit risk

   ▶ Raphaël ROERO DE CORTANZE Credit Rating Agencies

   ▶ Bijal GANDHI Credit Rating

   ▶ Dawn DENG Assessing a Company’s Creditworthiness: Understanding the 5C Framework and Its Practical Applications

Useful resources

China Bond official website

China Central Depository & Clearing Co., Ltd.

About the author

The article was written in November 2025 by Tianyi WANG (ESSEC Business School, Global Bachelor in Business Administration (GBBA), 2022-2026).

MSCI ESG Ratings

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MSCI ESG Ratings

Anant Jain

In this article, Anant JAIN (ESSEC Business School, Grande Ecole Program – Master in Management, 2019-2022) talks about MSCI ESG Ratings.

Introduction

MSCI ESG Rating is a measure of a company’s commitment to environmental, social, and governance (ESG) criteria and socially responsible investments (SRI). The MSCI ESG rating focuses on a company’s exposure to financially relevant ESG risks. It applies a rule-based methodology to distinguish companies into industry leaders and laggards based on their exposure to ESG risks and their relative aptitude to manage those risks compared to their peers. The ESG Ratings are ranked from leader (AAA, AA) to average (A, BBB, BB) to laggard (B, CCC).

Rating companies on the basis of ESG dimensions enables socially conscious investors to screen potential investments according to their personal investment goals and values.

Environmental, social, and governance (ESG) criteria

ESG criteria constitute a framework that helps socially conscious investors screen potential investments that incorporate their personal values/agendas. The ESG criteria screen companies based on sound environmental practices, healthy social responsibilities and moral governance initiatives into their corporate policies and daily operations.

Socially responsible investing (SRI)

SRI is a type of investment that is categorized to be socially responsible due to the nature of the operation the company conducts. SRI is an investment that considers two aspects:1) social/environmental changes; 2) financial performance. In other words, socially responsible investors promote practices that they believe will lead to environmental benefits, consumer protection, racial/gender diversity, etc. Some socially responsible investors also do the opposite of investing by avoiding companies that negatively impact society, such as alcohol, tobacco, deforestation, pollution, etc.

How Do MSCI ESG Ratings Work?

Over the past decade, ESG investing has become more popular. In 2020, the US SIF: The Forum for Sustainable and Responsible Investment published that more than $17 trillion of professionally managed assets were held in sustainable assets (about one-third of all assets under management).

Data providers have created various scoring criteria to rank and access potential ESG investments. Besides MSCI, other financial firms have curated their own proprietary ESG scoring models, including Standard & Poors (S&P), Blackrock, and Russell Investments. As a result, socially responsible investors can make more informed decisions when screening companies, ETFs, or mutual funds to include in their portfolios.

Division of ESG into pillars

MSCI’s ratings segregate ESG into its three pillars: environment, social, and governance. Figure 1 below shows the main components of each pillar and the key issues of each component.

MSCI evaluate thousands of data points across 35 ESG Key Issues that focus on the junction between a company’s core business and the industry-specific issues that may create significant risks and opportunities for the company. All companies are automatically evaluated for Corporate Governance and Corporate Behavior.

Figure 1. MSCI ESG classification.
MSCI ESG Classification
Source: MSCI.

For example, in Figure 1, we take the example of a soft drink sub-industry (say Coca-Cola). In this scenario, the key issues for the environment and social pillar are highlighted. All the key issues mentioned for the governance pillar will be automatically considered for this industry (or any other industry).

Calculation of MSCI scores

When calculating the ESG scores for a company, MSCI rates each key issue from zero to ten. Zero indicates virtually no exposure, and ten represents very exposure to a particular ESG risk or opportunity.

MSCI also evaluates a company for its possible exposure to dubious business activities (e.g., gambling, weapons, tobacco, etc.). The data informing these scores are received from corporate filings, financial reports, and press releases. In addition to this, almost half of all data comes from hundreds of third-party media, academic institutions, non-government organizations (NGO), regulatory, and government sources.

Scores based on a company’s individual metrics are aggregated, weighted, and scaled to the relevant industry sector. Finally, an intuitive letter-based grade gets assigned to the company.

Assessment of MSCI scores

MSCI distinguishes its grades into three categories, mentioned below in descending order:

  • 1. Leader (grade AAA & AA) – this grade indicates that a company is leading its relative industry. The company is managing the most significant ESG risks and opportunities.
  • 2. Average (grade A, BBB & BB) – this grade indicates a company has an unexceptional or mixed track record of alleviating ESG risks and opportunities.
  • 3. Laggard (grade B or CCC) – this grade indicates that a company is lagging in its industry because of the high exposure to ESG risks and failure to mitigate them.

Figure 2. MSCI ESG Score board.
MSCI ESG Score board
Source: MSCI.

Example of MSCI ESG rating

The following case below is a real-life example of the MSCI ESG rating of Tesla, an electric vehicle producer. The company attained an overall grade of “A”, achieving the higher end of the “average” category.

When we look at the breakdown of this rating:

  • Tesla exceeds corporate governance and environmental risks, maintains a comparatively small carbon footprint, and utilizes green technologies.
  • The company scores an average grade for product quality and safety due to its past experiences of exploding batteries, undesirable crash test ratings, and accidents involving the car’s “autopilot” feature.
  • Tesla’s score is below-average for labor management practices. Tesla has been found to violate labor laws by blocking unionization. It has also repeatedly violated the National Labor Relations Act.

It is fascinating to note that the French auto parts maker, Valeo SA is the only company in the auto industry that earns a “leader” category grade from the MSCI ESG Ratings.

Related posts on the SimTrade blog

▶ Anant JAIN Environmental, Social & Governance (ESG) Criteria

▶ Anant JAIN Dow Jones Sustainability Index

▶ Anant JAIN Socially Responsible Investing

Useful resources

MSCI

MSCI Ratings Methodology

Tesla’s MSCI Rating

US SIF

About the author

The article was written in July 2021 by Anant JAIN (ESSEC Business School, Grande Ecole Program – Master in Management, 2019-2022).

Credit Rating

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Bijal GANDHI

In this article, Bijal GANDHI (ESSEC Business School, Grande Ecole Program – Master in Management, 2019-2022) elaborates on the concept of Credit Rating.

This reading will help you understand the meaning, types, and importance of credit rating.

Introduction

Credit rating is the measurement of ability of the entity that seeks to borrow money to repay its financial obligation. Credit rating is based on the earning capacity of an entity as well as the history of the repayment of their past obligations. The entity seeking to borrow money can be an individual, a corporation, a state (at a national or federal level for some countries like the US), or a government agency. Credit ratings are used by banks and investors as one of the factors to determine their decision to lend money or not. Banks would develop their own credit analysis to decide to lend or not while investors would rely on the analysis by rating agencies to invest in credit products like commercial papers or bonds.

Rating agencies

The credit agency calculates the credit rating of an entity by analyzing its qualitative and quantitative attributes. Information can be procured from internal information directly provided by the entity such as financial statements, annual reports, etc. as well as external information such as analyst reports, published news articles, overall industry, etc.

A credit agency is not a part of the deal and therefore does not have any role involved in the transaction and, therefore, is assumed to provide an independent and honest opinion on the credit risk associated by a particular entity seeking to raise money through various means.

Now, three prominent credit agencies contribute 85% to the overall rating market:
1. Moody’s Investor Services
2. Standard and Poor’s (S&P)
3. Fitch Group

Each agency mentioned above utilizes a unique yet similar rating style to calculate credit ratings like described below,

Bijal Gandhi

Types of Credit Rating

Credit rating agencies use their terminology to determine credit ratings. Even so, the terminology is surprisingly similar among the three credit agencies mentioned above. Furthermore, ratings are grouped into two main categories:

Investment grade

These ratings indicate the investment is considered robust by the rating agencies, and the issuer is likely to complete the terms of repayment. As a result, these investments are usually less competitively priced when compared to speculative-grade investments.

Speculative grade

These investments are of a high-risk nature and hence offer higher interest rates to reflect the quality of the investments.

Users of Credit Rating

Credit Ratings are used by multiple entities like the following:

Institutional investors

Institutional investors like pension funds or insurance companies utilize credit ratings to assess the risk associated to a particular investment issuance, ideally with reference to their entire portfolio. According to the rate of a particular asset, it may or not include it in its portfolio.

Intermediaries

Credit ratings are used by intermediaries such as investment bankers, which utilize these ratings to evaluate credit risk and therefore derive pricing for debt issues.

Debt Issuers

Debt issuers like governments, institutions, etc. use credit ratings to evaluate their creditworthiness and to measure the credit risk associated with their debt issuance. These ratings can furthermore provide prospective investors in these organizations with an idea of the quality of the instruments issued by the organization and the kind of interest rate they could expect from such instruments.

Businesses & Corporations

Business organizations can use credit ratings to evaluate the risk associated with certain other organizations with which the business plans to have a future transaction/collaboration. Credit ratings, therefore, help entities that are interested in partnerships or ventures with other businesses to evaluate the viability of their propositions.

Understanding Credit Rating

A loan is a debt, which is the financial obligation with respect to its future repayment by the debtor. A credit rating helps to distinguish between debtors who are more liable to repay the loan compared to debtors who are more likely to be defaulters.

A high credit rating indicates the repayment of the loan by the entity without any possible defaults. A poor credit rating indicates the possibility of the entity defaulting the repayment of loans due to their past patterns with respect to loan repayments. As a result of the strong emphasis on credit rating, it affects an entity’s chance of being approved for a loan and receiving favorable terms for that loan.

Credit ratings apply to both businesses and the government. For example, sovereign credit ratings apply to the national government whereas corporate credit ratings apply for cooperation. On the other hand, credit scores apply only to individuals and are calculated by agencies such as Equifax, Experian, and TransUnion for the citizens of the United States.

Credit ratings can be short-term or long-term. A short-term credit rating reflects the history of an entity’s rating with respect to recent loan repayments and therefore poses a possibility for this borrower to default with its loan repayment when compared to entities with long-term credit ratings.

Credit rating agencies usually assign alphabet grades to indicate ratings. For example, S&P Global has a credit rating scaling from AAA (excellent) to C and D. They consider a debt instrument with a rating below BB to be a speculative-grade or junk bond, indicating they are more likely to default on loans.

Importance of Credit Ratings

Credit ratings for entities are calculated based on due diligence conducted by the rating agencies. While a borrowing entity will aim to have the highest possible credit rating, the rating agencies aim to take a balanced and objective view of the borrowing entity’s financial situation and capacity to honor/repay the debt. Keeping this in mind, mentioned below are the importance of credit ratings for various entities:

For Lending Entities

Credit ratings give an honest image of a borrowing entity. Since no money lender would want to risk giving their money to a risky entity with a high possibility of default from their part, credit ratings genuinely help money lenders to assess the worthiness of the following entity and the risk associated with that entity, therefore helping them to make better investment decisions. Credit ratings act as a safety guard because higher credit ratings assure the safety of money and timely repayment of the same with interest.

For Borrowing Entities

Since credit ratings provide an honest review of a borrower’s ability to repay a loan, borrowers with high credit ratings find it easier to get loans approved by money lenders at interest rates that are more favorable to them. A considerable rate of interest is very important for a borrowing entity because higher interest rates make it more difficult for a borrower to repay the loan and fulfill their financial obligations. Therefore, maintaining a high credit rating is essential for a borrower as it helps them get a considerable amount of relaxation when it comes to a rate of interest for the loan issued to them. Finally, it is also important for a borrower to ensure that their credit rating has a long history of high rating. Just because a credit rating is all about longevity. A credit rating with a long credit history is viewed as more attractive when compared to a credit rating with a short credit history.

For Investors

Credit ratings play a very crucial role when it comes to a potential investor’s decision to invest or not in a particular bond. Now, investors have different risk natures associated with them. In general, investors, who are generally risk-averse in nature, are more likely to invest in bonds with higher credit ratings when compared to lower credit ratings. At the same time, credit ratings help investors, who are risk lovers to differentiate between bonds that are riskier due to the lower credit ratings and invest in them for higher returns at the risk of higher defaults associated with them. Overall, credit ratings help investors make more informed decisions about their investment schemes.

Related posts on the SimTrade blog

   ▶ Jayati WALIA Credit risk

   ▶ Bijal GANDHI Interest Rates

   ▶ Georges WAUBERT Credit analyst

   ▶ Aamey MEHTA My experience as a credit analyst at Wells Fargo

   ▶ Jayati WALIA My experience as a credit analyst at Amundi Asset Management

   ▶ Louis DETALLE My professional experience as a Credit Analyst at Société Générale

Useful resources

S&P Global Ratings

Moody’s

Fitch Ratings

About the author

Article written in May 2021 by Bijal GANDHI (ESSEC Business School, Grande Ecole Program – Master in Management, 2019-2022).