Credit rating agencies easy way to understand, just what to what, no in-depth methodology. By Chand basha mcb

1. CREDIT RATING AGENCIES
Chand basha mcb

2. INDEX
• What is credit rating and agency
• Global credit rating agencies
• Domestic credit rating agencies
• Grading by Credit Rating Agency
• Advantages & Disadvantages

3. WHAT IS CREDIT RATING AND AGENCY
• Credit rating: It is an analysis of the credit risks associated with a
financial instrument or a financial entity.
Based on the financial history of borrowing or lending and credit
worthiness of the entity or the person obtained from the statements of its
assets and liabilities with an aim to determine their ability to meet the
debt obligations.
• Credit rating agency: It is a company that assigns credit ratings, which
rate a debtor’s ability to pay back debt by making timely interest
payments and the likelihood of default. It includes govt bonds, corporate
bonds, certified deposits(CDs], prfd stock etc.,

4. GLOBAL CREDIT RATING AGENCIES
• Moody’s investor service
• Standard & Poor’s corporation(S&P)
• Fitch group
• Japan credit rating agency(JCR)

5. DOMESTIC CREDIT RATING AGENCIES
• Credit rating and information services of India limited(CRISIL)
• Credit analysis and research limited(CARE)
• Investment information and credit rating agency of India limited(ICRA)
• Credit information bureau India limited(CIBIL)

6. GRADING BY CREDIT RATING AGENCY
Rating category Description
AAA Highest Safety
AA High Safety
A Adequate Safety
BBB Moderate Safety
BB Moderate Risk
B High Risk
C Very High Risk
D In default

7. ADVANTAGES OF CREDIT AGENCIES
• They Help Good Institutions Get Better Rates
• They Warn Investors of Risky companies
• They Provide a Fair Risk-Return Ratio
• They Give Institutions an incentive to Improve

8. DISADVANTAGES OF CREDIT RATING AGENCIES
• Evaluation is Highly Subjective
• There can be Conflict of interest
• Ratings aren’t always Accurate

9. Thank you