Moody's assigned an A3 issuer rating to
The A3 rating takes into account CITIC Group's"ba1" baseline credit assessment and a four-notch uplift based on theagency's expectation of a high level of financial support from the Chinesegovernment in times of need.
Moody's expects CITIC Group to be able to obtain a highlevel of financial support due to the firm's close relationship with China'sState Council, the reputational risk for the Chinese government should CITICGroup experience a business failure and the systemic importance of CITICGroup's financial units, specifically China CITIC Bank Corp. Ltd.
The ratings outlook is negative.
The negative outlook incorporates China CITIC Bank'sweakening credit profile and the possibility that CITIC Group's issuer ratingwill be affected by potential weaker support from the Chinese government,following the change in outlook on China's Aa3 sovereign rating to negativefrom stable.
The outlook could return to stable if the outlook on China'ssovereign rating returns to stable. Moody's may also upgrade the outlook ifsupport from Chinese government increases and there is improvement in thecompany's operational and financial profiles.
The rating may be downgraded if government support andCITIC Ltd.'sstand-alone strength weakens. CITIC Group's aggressive expansion of itsnonfinancial businesses, leading to higher-than-expected debt leverage orbusiness risks may also lead a ratings downgrade.