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UOB, fintech Value3 Advisory to launch AI-enabled credit rating platform in Asean

UNITED Overseas Bank's asset management arm has tied up with fintech startup Value3 Advisory to launch an artificial intelligence-enabled (AI-enabled) credit rating platform in Asean to help bond investors make more effective investment decisions. 

This partnership seeks to bring Value3 Advisory's AlgoCRED AI-platform - an online portal offering automated credit ratings, research and insights for the region’s corporate bonds - to investors in the region, said UOB Asset Management (UOBAM) in a statement on Wednesday. 

Asset managers, financial advisory firms and institutional investors will soon be able to access independent credit ratings for unrated bonds in Asean on the AlgoCRED platform. This will enable bond investors to evaluate more accurately the issuers’ credit worthiness, as well as the issuances' investment merits, said UOBAM.  

AlgoCRED is currently available only in Switzerland, covering some 1,400 Swiss franc-denominated bonds. The portal is set to go live in Singapore in December and subsequently in other Asean markets. 

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UOBAM said it will combine its regional investment expertise with Value3 Advisory's machine learning and natural language processing technologies, to develop thorough predictive analytics of Asean corporate bond issuers’ financial and non-financial data collected from diverse sources. It will also provide regional market and industry insights to help roll out the platform in the region. 

Automated quantitative and qualitative assessments will then be conducted to derive credit ratings, create credit risk indicators with real-time alerts and generate detailed credit rating reports.

“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, UOBAM chief investment officer for equities and fixed income. 

Value3 Advisory chief executive Abhinav Mishra said the AlgoCRED platform will address the demand for standardised credit rating services for unrated bonds. "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," he noted. 

To ramp up its own responsible investing efforts, UOBAM will also work with Value3 Advisory to embed environmental, social and governance considerations into an exclusive credit rating model on the AlgoCRED platform.

"We will tap AI to automate our credit research and assessment processes and be far more efficient in our fixed income evaluation and investment management," said Mr Chong.