[HONG KONG, December 21, 2023] CSPI Ratings has assigned a preliminary rating of A(sf) to Micro Connect 2023-1 DRO-backed Class A Senior Loans, which are backed by a portfolio of Daily Revenue Obligations (DROs) listed on the Micro Connect (Macao) Financial Assets Exchange (MCEX).
This is the first instance of a financial product with DRO as its underlying asset to receive an international rating. It serves as a crucial reference for expanding the DRO-based investment and financing market for micro and small businesses.
DRO is an innovative product based on daily revenue, poised to address the financing faced by small businesses, by offering flexible funding that aligns with their cash flow patterns. For investors, DRO offers a unique investment opportunity with differentiated returns, exposure to China’s economy, and the potential for high returns.
According to the rating report, the underlying portfolio of DROs is well-diversified, encompassing a broader range of small businesses from various industries and regions. This diversification decreases the risks associated with individual businesses and leads to more stable and predictable cash flow distributions.
The rating reaffirms Micro Connect’s strength in capital, risk, and liquidity management, increasing the visibility and influence of MCEX in the international capital markets. The rating will also help reduce financing costs for micro and small businesses and support their business development.
Please find the report here for more details.: https://www.cspi-ratings.com/rating-actions/rating/CSPI-Ratings-Assigned-Asf-Preliminary-Ratings-to-Micro-Connect-2023-1-DRO-backed-Class-A-Senior-Loans.html
About Micro Connect
Micro Connect Group is committed to connecting global capital with small businesses. Micro Connect Macao Financial Assets Exchange (MCEX) officially started operation on August 3, 2023. Based in Macao, it’s an international exchange of revenue sharing products. The exchange is Macao’s new exploration to promote modern financial development and address the financing difficulties of small businesses through digitization and financial innovation. By the end of November, Micro Connect had invested over RMB 3 billion in more than 10,000 micro and small stores.