CRIF Rating Agency is an independent ratings provider founded in 2010 in Italy and authorized to assign ratings across the EU. It has rated over 60 corporates across various industries and countries. The agency delivers issuer and issue ratings using letter grade scales to communicate credit quality and default risk. It prides itself on thorough ongoing monitoring of rated entities using multiple sources of information.

1. An overview of CRIF
Rating Agency
5 november 2015
©2015

2. Agenda
 History and Scope of Business
 Organization and Credentials
 What We Deliver & What Is
Behind Our Ratings
 What Investors Should
Appreciate
©20152

3. History and Scope of Business
Who we are
 Founded in 2010 as an independent initiative of the CRIF Group following
strong market demand for new ratings providers
 Recognized by ESMA in Dec2011 as per Reg. (EC) 1060/2009
 Authorized to assign regulatory ratings to non-financial corporates within
the whole EU
What we do
 Credit ratings to non financial corporates, in Italy and in Spain
©20153

4. History and Scope of Business
 Achieved a broad and diversified portfolio of 60+ rated
corporates:
− …with turnovers from Eur15mln to Eur30bln
− …in a wide range of sectors including energy, food,
manufacturing, construction & engineering, retailers,
utilities, telecoms, diversified services
− …with ratings requested by issuers or third parties (mostly
debt investors)
 Ongoing investments to expand rating activities abroad:
partnership with Spanish Informa D&B (CESCE Group) to offer
rating services to Spanish corporates
 Offices in Bologna – Italy, and in Barcelona - Spain
©20154

5. History and Scope of Business
 Strong domestic presence: rating analysts with diversified experiences
in corporate risk evaluation: 16 analysts in Italy, 1 in Spain
 Team of 3 Credit Officers dedicated to improve and validate rating
methodologies
 Unique database of financial information on all Italian corporates +
database of bank credit information + real-time monitoring of corporate
events from a comprehensive range of sources + series of Italian
corporates‘ default data by size / industry sector / geography
 Unique observatory on corporate credit behaviours and default rates,
current and hystorical, by sectors/credit lines, type of facility, guarantees
 Wide coverage of the Italian population of retail and small businesses:
Consumers (>93%); Small Businesses (>79%); Corporates (70%)
 Strong franchise thanks to more than two decades of experience in
credit assessment supporting major Italian Financial Institutions’ credit
processes
©20155

6. IT & Data
Management
President
General
Manager
Marketing &
Business
Development
Corporate
Ratings
Credit Policy
Internal
Audit
Legal
Business
Process
Engineering
Risk
Management
& Business
Continuity
Executive
Committee
(4 INED’s)
Compliance
Organization
& Internal
Processes
Organization and Credentials
©20156

7.  Involved with the EIB as part of the Hydrobond1 - Viveracque CBO transaction,
which «is not rated but the eight utilities have unsolicited ratings from Italian CRIF
Rating Agency and the EIB as major investor.» Reuters, 22 July 2014
 Due Diligenced by the EIF which acts as guarantor of all bonds underwritten by
Anthilia BIT private debt fund: each single issuer is assigned a rating by CRIF
Rating Agency.
 Over 35 ratings requested by corporates and kept private and confidential:
− Listed co’s on the Milan Stock Market’s MTA, Star and AIM and on Madrid’s S.E.
− Predominantly Sme’s but not only (3 issuers have a T.O. > €600 mln.)
− Mostly to issue bonds but not necessarily (visibility, financial discipline, etc.)
 Over 30 unsolicited ratings (requested and paid for by investors)
Organization and Credentials
©20157

8. Organization and Credentials
Credit Rating Agency Country of Residence
Ratings to non-financial
corporates
A.M. Best Europe - Rating Services Ltd UK 47
Axesor SA Spain 61
Cerved Rating Agency Spa Italy 28,903
ARC S.A. Portugal 5
CRIF Rating Agency Italy 48
Creditreform Rating AG Germany 67
Dagong Europe Italy - China 0
DBRS Rating Ltd. Canada - UK 14
Euler Hermes Rating Deutschland GmbH Germany 29
EuroRating Sp. z o.o. Poland 13
Feri EuroRating Services AG Germany 4
Fitch Ratings USA 613
Icap Group SA Greece 1,619
Japan Credit Rating Agency Ltd. Japan 5
Moody's Investors Service USA 826
Scope Credit Rating Germany 106
Spread Research France 45
S&P Rating Service USA 1,050
The Landscape Within the EU: ESMA/CEREP Statistics on Rating Activity, 30
December 2014
©20158

9. What We Deliver & What Is Behind Our Ratings
A Full Range of Services to Match Different Market Needs
 Issuer Rating
 Solicited Issue Rating
 Unsolicited issuer rating
Default Probability (PD)
 Issue Rating
Recovery Rate (RR)
©20159

10. What We Deliver & What Is Behind Our Ratings
Our Rating Scale – Issuer and Issue Rating
Issuer Rating Issue Rating Issuer rating scale description Issue rating scale description
AAA AAA AAA AAA
Issuer with excellent credit quality
Risk of default is lowest
Debt instrument with lowest risk of
default
AA
AA+
AA
AA+
Issuer with very good credit quality
Risk of default is very low
Debt instrument with very low risk of
defaultAA AA
AA- AA-
A
A+
A
A+ Issuer with good credit quality but more vulnerable to adverse business or
economic conditions
Risk of default is low
Debt instrument with low risk of
default
A A
A- A-
BBB
BBB+
BBB
BBB+ Issuer with satisfactory credit quality but vulnerable to adverse business or
economic conditions
Risk of default is moderate
Debt instrument with moderate risk of
defaultBBB BBB
BBB- BBB-
BB
BB+
BB
BB+ Issuer with modest credit quality, vulnerable to adverse business or economic
conditions and speculative characteristics
Risk of default is substantial
Debt instrument with speculative risk
elements Risk of default is substantial
BB BB
BB- BB-
B
B+
B
B+ Issuer with poor credit quality, vulnerable to adverse business or economic
conditions and highly speculative characteristics
Risk of default is significant
Debt instrument with clear speculative
risk
Risk of default is significant
B B
B- B-
CCC CCC
CCC CCC
Issuer with business and financial risk highly and structurally compromised,
highly vulnerable to adverse economic conditions and highly speculative
characteristics
Risk of default is realistic
Debt instrument with a realistic
possibility of default and highly
speculative characteristics
CC CC NA
Debt instrument with a probable
possibility of default
C C NA
Debt instrument with imminent or
inevitable default, or in standstill
situation.
D
D1
D
Issuer with public information of unpaid financial obligations but not yet under
barkruptcy or winding up procedures
/
D1S DS Issuer with one or more unpaid financial obligations
Debt instrument that has experienced
a payment default on one or more of
its financial obligations
D2 Issuer that has entered into bankruptcy filings, or formal winding-up procedures /
©201510

11. What distinguishes CRIF from other rating agencies?
Overview
Financial
Risk
Business
Risk
CBDI
Financial
Statements
Credit
Bureau
Public
Information
What We Deliver & What Is Behind Our Ratings
©201511

12. INITIAL
RATING
REQUEST
INFO
LIST
RATING
PROCESS
STARTS
RATING
PROPOSAL
TO THE
RATING
COMMITTEE
RATING
IS
DELIVERED
FILTERING
COMMITTEE
(typically 2
working days)
ONGOING
MONITORING
OK
KO RATING REQUEST
IS DECLINED
APPEAL
(just 1x)
What Investors Should Appreciate
The Filtering Barrier Before Starting: the Courage to Say «NO» to Issuers
©201512

13. What Investors Should Appreciate
Sound ongoing monitoring process based on a variety of sources, implying
that:
 All regulatory ratings (both solicited and unsolicited ratings) are
monitored on an ongoing basis
 For all rated entities including SME’s, ratings are:
− formally revised at least once a year (ESMA requirement), but most of all…
− revised anytime “alerts” or “credit events” lead to an earlier revision (new
accounts + P&L released, relevant update from the CIS and/or public
information/extraordinary events, updates of issuer’s financial structure)
 Surveillance is truly ongoing: monitoring activities rely on any public info
+ issuer’s proprietary information + credit data owned by CRIF
(Italy) and by Informa D&B (Spain)
Ongoing monitoring process
©201513

14. Monitoring procedures and regulatory disclosure
What Investors Should Appreciate
 CRIF Rating Agency adopts procedures and processes that are designed
and periodically updated by its Organization & Procedures function and
are subject to approval by the Executive Committee.
 CRIF Rating Agency regularly provides ESMA with the following
information:
− Rating issued, new rating actions and defaults incurred since the last
communication (every two months)
− Cost and Revenues of CRIF Rating Agency, staff turnover, vacancies
and key promotions (every three months)
− Models and processes revisions and related backtesting evidences,
Compliance, Internal Audit and Risk Management function reports,
minutes of the Executive Committee meetings, etc. (every six
months)
©201514

15. Thank you
for your attention
marketing.cra@crif.com
Our office:
Italy
Via Fantin, 1-3 - 40131 - Bologna - Italy
Spain
Triangle Building - Plaza Catalonia, 1 - 4th fl.
Barcelona 08002 - Spain