Moody’s Investors Service announced that it is making a foray into China. The credit rating agency has signed a definitive agreement to acquire 49% of China Cheng Xin International Credit Rating Co. Ltd.

Moody’s is buying the stake from China Cheng Xin Credit Management Co. Ltd. and an affiliated entity. Terms of the transaction are not being disclosed.

CCXI, established in 1992, was the first nationwide domestic credit rating agency created with the approval of the People’s Bank of China. Headquartered in Beijing, the firm boasts over 40 professional staff. The agency specializes in providing rating opinions on corporate bonds, convertible bonds, financial institutions, structured finance and short term financing paper.

Moody’s says that it will provide management expertise, technical support on rating methodologies, and analyst training. As a licensed domestic credit rating agency, CCXI will continue to provide domestic ratings reflecting relative credit risk within China, while Moody’s will continue to provide globally comparable ratings for cross-border financings. Moody’s and CCXI also plan to market joint ratings to global issuers in the local Chinese markets.

“Moody’s partnership with CCXI establishes an important platform for Moody’s to support credit ratings, research and analysis in China. Moody’s will benefit from CCXI’s local market knowledge and CCXI will benefit from Moody’s experience in global credit ratings and analysis,” said Raymond McDaniel Jr., chairman and chief executive officer of Moody’s Corp.

“As the only partnership between a domestic Chinese agency and a leading international agency, CCXI will be able to provide a highly differentiated offering to the domestic Chinese capital markets,” added Chester Murray, executive vice president for Moody’s international business. “This joint venture will allow us to address the growing demand for credit analysis, ratings, research and training in China.”

Mao Zhenhua, chairman of CCXCM said, “We are pleased to enter into this partnership with Moody’s Investors Service, which is one of the world’s leading rating agencies”. Mao added, “CCXI has a leading position in the Chinese market, and we believe that the Moody’s affiliation will help us to better serve the domestic capital market.”

Moody’s says that it will have the ability to increase its ownership over time as permitted by Chinese authorities. The transaction will be subject to regulatory approvals by the Chinese government.