SHANGHAI (Reuters) – The Beijing-based unit of S&P Global on Thursday became the first international credit rating agency to rate a domestic issuer in China, a long-awaited step in the development of the country’s $13 trillion bond market.

Chinese bond investors hope that ratings by international agencies will help to shake up domestic counterparts which assign relatively safe AA ratings to the vast majority of issuers, and have come under regulatory fire for operational violations.

S&P Global (China) Ratings said it assigned a AAA issuer credit rating to ICBC Financial Leasing Co, with a stable outlook. The AAA rating, S&P’s highest, reflects an issuer’s “extremely strong capacity to meet its financial commitments”, the agency says.

S&P said a mismatch in the durations of ICBC Financial Leasing’s assets and debt presented some liquidity risk, but diverse funding sources and liquidity support from parent Industrial and Commercial Bank of China (ICBC) (601398.SS) made the risks “manageable”.

ICBC Financial Leasing (ICBCFL) describes itself as a leading leasing firm in China, involved in leasing aircraft, ships and industrial equipment. Its four outstanding bonds in China’s interbank market are worth a total of 10 billion yuan ($1.46 billion), according to Refinitiv data.

The company also has a AAA long-term issuer credit rating from domestic agency China Lianhe Credit Rating Co.

S&P, along with Moody’s Investors Service and Fitch Ratings, previously assigned ratings for ICBCFL’s overseas debt issues.

Thursday’s rating follows S&P’s approval by the People’s Bank of China in January to enter the domestic credit rating market, the first time a foreign rating agency received a license to rate domestic bonds. S&P Global (China) Ratings is wholly owned by S&P Global Inc (SPGI.N).

Fitch, which has established a domestic entity, and Moody’s have also applied for licenses.

Josh Sheng, chief investment officer at Shanghai Tongshengtonghui Asset Management, said domestic investors needed time to understand foreign agencies’ ratings.

“Mutual acceptance will take place gradually,” he said.

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