An objective assessment of the financial condition of an obligor and its ability to meet obligations as and when due
- As an Entity (Obligor)
- Independent and internationally recognised way of communicating the financial strength of a company to lenders and the public
- A rating enhances the ability of a company to access the local currency money and capital markets
- A way of getting “Consulting Advice” as it provides a company’s management with an independent opinion on the organisation and its operations
- As Investors & Lenders
- Provides an independent credit evaluation
- Provides independent information to treasurers, credit risk managers or other persons who have responsibility for setting risk acceptance criteria
- Provides a common language for debt markets and a basis to compare securities with similar credit risks
- The rating and accompanying analysis help in disseminating information and imparting transparency to all, including less sophisticated investors
- A Financial System
- Fosters the development of the capital and money markets.
- Increases transparency
- Broadens the investor base and the range of borrowers.
- Promotes merit based access to funding
- Complements the role of regulatory authorities
- A Rating is not a recommendation to purchase, sell or hold a financial obligation and is not a measure of asset value.
- A Rating is not an equity opinion and therefore does not assess the ability of a company to create value for its shareholders.
- A Rating is not an audit. It is merely an objective assessment based on a predefined methodology.
- Ratings can only be provided when there is adequate information available to form a credible opinion, and after applicable quantitative and qualitative analyses are performed.
- Rating opinions are conveyed in a simple scale, for easy reference and comparability.