Credit rating

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Credit rating

  1. 1. A credit rating is an evaluation of the credit worthiness of a debtor, especially a business (company) or a government, but not individual consumers. The evaluation is made by a credit rating agency of the debtor's ability to pay back the debt and the likelihood of default
  2. 2. Types of Credit Rating •International Ratings •National Ratings
  3. 3. • Benefits to Investors • Benefits of Rating to the Company • Benefits to Intermediaries
  4. 4. Disadvantages of credit rating •Biased rating and misrepresentations •Static study •Concealment of material information •Rating is no guarantee for soundness of company •Human bias •Reflection of temporary adverse conditions •Difference in rating of two agencies

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