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Credit Rating Agency

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Credit Rating Agency Credit rating agency A Credit rating agency (CRA) is a company that assigns credit ratings for issuers of certain types of debt obligations as well as the debt instruments themselves. In some cases, the servicers of the underlying debt are also given ratings. In most cases, the issuers of securities are companies, special purpose entities, state and local governments, non-profit organizations, or national governments issuing debt-like securities (i.e., bonds) that can be traded on a secondary market. A credit rating for an issuer takes into consideration the issuer's credit worthiness (i.e., its ability to pay back a loan), and affects the interest rate applied to the particular security being issued. The value of such security ratings has been widely questioned after the 2007-09 financial crisis. In 2003 the U.S. Securities and Exchange Commission submitted a report to Congress detailing plans to launch an investigation into the anti-competitive practices of credit rating agencies and issues including conflicts of interest.[1] More recently, ratings downgrades during the European sovereign debt crisis of 2010-11 have drawn criticism from the EU and individual countries. A company that issues credit scores for individual credit-worthiness is generally called a credit bureau (US) or consumer credit reporting agency (UK). List of credit rating agencies Agencies that assign credit ratings for corporations include: A. M. Best (U.S.) Baycorp Advantage (Australia) Capital Intelligence (Cyprus)[34] Capital Standards Rating (Kuwait)[35] Credo line (Ukraine) Dagong Global (People's Republic of China) Dominion Bond Rating Service (Canada) Egan-Jones Rating Company (U.S.) Fitch Ratings (Dual-headquartered U.S./UK) CIBIL (India) Japan Credit Rating Agency, Ltd. (Japan)[36] Moody's Investors Service (U.S.) Muros Ratings[37] (Russia alternative rating agency) Rapid Ratings International (U.S.) Standard & Poor's (U.S.) Weiss Ratings (U.S.) There are no notable European CRAs, except for Fitch, 80% of which is owned by FIMALAC, a French firm. A.M. Best Company, Inc., headquartered in Oldwick, New Jersey, is a rating agency designated as a Nationally Recognized Statistical Rating Organization (NRSRO) by the United States Securities and Exchange Commission. Founded in 1899 by Alfred M. Best in New York City, the privately held company moved to Morristown, New Jersey, in 1965, and subsequently to Oldwick, New Jersey, in 1974.[1] It also maintains offices in London and Hong Kong and a news bureau in Washington, D.C. A.M. Best issues financial-strength ratings measuring insurance companies' ability to pay claims. It also rates financial instruments issued by insurance companies, such as bonds, notes, and securitization products Unlike fellow NRSROs Standard & Poor's, Moody's and Fitch Ratings -- all three of which issue ratings for a broad range of business sectors—A.M. Best historically has focused exclusively on the insurance marketplace. Veda Advantage Type Private Company Founded 1967 Headquarters Sydney, Australia Products Business Services Website www.vedaadvantage.com Veda Advantage is the largest credit reference agency in Australia and New Zealand. It provides credit reporting, credit scoring, and marketing analytics services. The Company was previously known as Baycorp Advantage, which was a merger of Australian company Data Advantage and New Zealand Company Baycorp. The name change was prompted by the sale of the Baycorp Collection Services which will retain the Baycorp name. The name change has already been applied to its listing on the Australian Stock Exchange. Data Advantage previously owned Credit Advantage, which itself was formerly known as the Credit Reference Association Of Australia. It held records on over 12 million people and one million businesses. Credit Advantage was used by approximately 3,800 credit providers, who made a total of 45,000 enquiries per day. Due to legal restrictions, Credit Advantage did not report any positive information. It wes essentially a "blacklist" containing listings of accounts that are at least 60 days past due, along with public records of lawsuit judgements and bankruptcies. Bounced cheques of over $100 (after two attempts at clearing) and enquiries wereed also listed. Credio line: History Information and Rating Agency Credo Line was established with support of foreign export credit agencies and Ukrainian partners in June 2008 with the view to achieving maximum transparency on the information market of CIS countries and qualitative improvement of rendered services. The described support is explained by utmost necessity of establishment of an objective, independent and specialized rating agency, professionally able to credit assess risks of importing enterprises located in Ukraine, as well as throughout territory of the CIS region. Now and then it’s a privately-owned company with 100% Ukrainian capital, run since the foundation date by the general Director Ms. Katerina Bogdanenko . The Agency’s Goal is to systematize and discipline the beneficial multilateral foreign economic relations between foreign partners and CIS partners on all of cooperation stages. Different mentality, various approaches to business conduct, different legislative base, accounting standards should not be a barrier while any international transaction between mentioned parties, and with its services’ complex Credo Line is putting every effort to facilitate such multicultural business collaboration. [edit] Ratings & Rating scale In the process of credit rating assignment the Agency uses its own complex methodology. Agency’s rating methodology is based on a special balanced system of indexes, which includes an influence of country risk and is recognized by leading export credit agencies and other financial institutions. The completeness of indexes list used in the process of evaluation of a company's financial position and performance (absolute indexes, financial stability ratios, solvency ratios, profitability ratios, efficiency ratios, insolvency ratios) and special procedure of reliability audit and correctness of forming basic data allow to evaluate financial position and performance of a rated company in the most objective way. Moreover, the given methodology is particularly adjustable within the trade financing processes and enables to accurately determine the maximum value of rating and maximum amount of credit limit. Scale of credit rating used by the Agency analysts was elaborated as well by the Agency itself for the purpose of estimation of creditworthiness, the level of financial stability, aptitude towards country risk, as well as nonpayment risk of a rated company. Like others world-wide credit rating agencies (the so-called ‘Big three credit rating agencies’ - Standard & Poor's, Moody's Investor Service and Fitch Ratings), Credo Line uses the same internationally-recognized letter designations such as A, B, C and D. Dagong Global Credit Rating Dagong Global Credit Rating Co. Industry Financial Services Founded 1994 Headquarters Beijing, China Key people Guan Jianzhong (Chairman) Website dagongcredit.com Dagong Global Credit Rating (大公国际资信评估有限公司; pinyin: Dàgōng Guójì Zīxìn Pínggū Yǒuxiàn Gōngsī) is a credit rating agency based in China. It is one of the few notable non-US based credit rating agencies.[1] It is recognized as a credit rating agency which gave the US debt a lower credit rating than that given by the three traditional rating agencies Moody's, Standard and Poor's and Fitch.[2] The U.S. Securities and Exchange Commission has refused to recognize Dagong's ratings because of the commission's inability to supervise the Beijing-based agency.[3] Long-term credit ratings Dagong rates borrowers on a scale from AAA to C. Intermediate ratings are offered at each level between AA and CC (e.g., AA+, AA, and AA-).[4] AAA: Highest credit rating AA: Very High credit rating A: High credit rating BBB: Medium credit rating BB: Low medium credit rating B: Relatively low credit rating CCC: Low credit rating CC: Very low credit rating. C: Lowest credit rating. Issuer is unable to meet financial obligations and possibly in the process of bankruptcy. [edit] Short-term credit ratings Debt with maturity dates of 1 year or shorter are rated on a scale from A-1 to D. No intermediate ratings (e.g., B+ and B-) are used. [4] A-1: Highest credit rating A-2: Good credit rating A-3: Fair credit rating B: Significant speculative credit rating C: High default risk credit rating D: Default DBRS is a credit rating agency headquartered in Toronto, Ontario. Founded in 1976 by its current owner and president, Walter Schroeder, it is the largest rating agency in Canada. It is one of ten Nationally Recognized Statistical Rating Organizations in the United States, though significantly smaller than market leaders Moody's, Standard & Poor's and Fitch Ratings. It has also received ECAI recognition from several European countries. [edit] Rating scale Rating Scale: Commercial Paper and Short-Term Debt The DBRS short-term debt rating scale is meant to give an indication of the risk that a borrower will not fulfill its near-term debt obligations in a timely manner. Every DBRS rating is based on quantitative and qualitative considerations relevant to the borrowing entity. Egan-Jones Rating Company, also known as EJR, was founded in 1995 and actively rates the credit worthiness of approximately 2000+ high yield and high grade U.S. corporate debt issuers. Egan-Jones is wholly supported by investors to minimize
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