UOB Asset Management will collaborate with fintech startup Value3 Advisory to launch an automated ratings platform for ASEAN bonds.

The platform will leverage Value3’s machine learning and natural manage processing technology with UOB Asset Management’s (UOBAM) regional investment expertise to provide real-time fixed income insights to drive investment decision-making. Automated quantitative and qualitative assessments will also be conducted to generate credit ratings through its proprietary AlgoCRED AI-platform, including for unrated bonds – the first such independent offering in the market.

«Across ASEAN, many corporate bond issuers may shy away from seeking ratings for their bond issuances due to the high fees that may be incurred or the time needed to obtain and to maintain the rating,» said Chong Jiun Yeh, CIO (equities and fixed income) at UOBAM, adding that corporate bond issuers can obtain ratings on the AlgoCRED AI-platform for no fees.

«Across ASEAN, many corporate bond issuers may shy away from seeking ratings for their bond issuances due to the high fees that may be incurred or the time needed to obtain and to maintain the rating.» 

Creating Standards

In addition to efficiency and costs, the platform intends to address the lack of standardization in the methodology of assessing unrated bonds which create headwinds for attracting capital.

«Through our collaboration with UOBAM, we will bring our proprietary and award-winning AlgoCRED Al-platform to ASEAN to address the demand for standardized credit rating services for unrated bonds,» said Abhinav Mishra, Co-Founder and CEO of Value3. «This will help corporate issuers, especially small- and medium-sized enterprises, to be more transparent in their disclosure and to attract more investors for their bonds.» 

To further enhance standards that will stand the test of time, UOBAM will also collaborate with Value3 to embed environmental, social and governance-related factors in an exclusive credit rating model on the AlgoCRED AI-platform to drive more responsible investing. 

The credit rating, research and reporting service is expected to be launched first in Singapore in December 2019 and before subsequently be rolled out to other ASEAN markets.