China’s credit rating agencies are standing by their triple A scores for troubled state-owned enterprises, even as a series of defaults reverberates through the country’s $4tn corporate debt market.

Just five Chinese companies out of more than 5,000 have been downgraded to below double A ratings by domestic rating agencies since Yongcheng Coal and Electricity Holding Group, one of the country’s largest coal groups, kicked off a spate of defaults last month, according to data provider Wind.

Double A ratings are crucial in China as groups with lower ratings cannot issue publicly traded debt. More than 98 per cent of the outstanding bond issuance in the country is backed by issuers graded double A or higher. Since it defaulted, Yongcheng has become one of the few companies to be relegated below this mark.