Moody Real Estate Industry Ratings Grid Research

In the international context of the global rating market is monopolized by the three major rating agencies, due to Chinese later start in the area of credit rating industry, its rating technology, system construction and supervision are relatively backward, in order to enhance the voice of our country on the international capital markets and on the certain degree of capital pricing power, and protect national strategic industry information security, Chinese must learn from the West countries. In view of the important role of the Chinese real estate industry in the development of the national economy as a whole, I select real estate rating as my study subject. The article outlines the major rating method abroad, and summarizes Chinese academics in-depth research in Chinese real estate industry ratings combined with the actual situation of domestic enterprises and absorbing Western rating technology, this paper on the basis of careful and detailed study of the latest real estate Moody’s rating methodology which focus on evaluating six factors including competitive position and diversity, operating efficiency, capital structure, financial strength, liquidity and operating strategy, then broken these six factors down into17sub-factors, respectively assigned to each sub-factors suitable weight.17sub-factors were investigated for each enterprise, according to Moody’s standard to determine the level of per factor can correspond to. Then convert the level of each sub-factors criteria according to Moody’s corresponding values into corresponding numerical combined weight to calculate the weighted average value of each enterprise, and then come to the end of the rating level.Based on the global applicability of the rating methodology, we applied it into credit rating of Chinese real estate enterprises.13domestic real estate enterprises were inspected their indicators performance in six rating factors which Moody focus on, while combined with the actual situation of Chinese real estate enterprises. Then correspond Moody’s rating criteria to draw a final rating results, and analysis the reason of outlier between the results of this method with enterprise actual rating level.Research on Moody’s rating methodology helps domestic scholars understand the basic idea of the Moody’s rating method better; help investors, bond issuers and market participants to enhance the understanding of the rating industry; help domestic rating agencies learn the latest Western rating method, combined with domestic rating practices to improve the current rating system, to enhance the authority of the international credit rating market for Chinese rating agency, has a certain role in promoting raise voice in the international capital markets and capital pricing. The article points out improvements still needing to do in Moody’s rating methodology. Scholars around the world have to continue in-depth study to meet the shortfall. At the same time, account of the status quo of Chinese credit rating industry, some suggestions for the direction of the future development of the domestic rating agency are proposed.