rating

1. CREDIT
RATING
Presented By: Sumit
Roll no:- 14104024
Class: MBA (Finance)
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2. CONTENTS:
• Meaning
• International Rating Agency
• Credit rating agencies in India
• CRISIL
• ICRA
• CARE
• SMERA
• Credit rating process
• Benefits Of Rating
• Rating Grades
• Reference
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3. CCRREEDDIITT RRAATTIINNGG
Credit rating is the symbolic indicator of
the current opinion of the rating agency
regarding the relative ability of the
issuer of the debt instrument to meet the
service obligations as and when they
arise.
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4. CCRREEDDIITT
RRAATTIINNGG
 Specificity: To a debt instruments
 Relativity: Rating based on the capability
& willingness of the issuer of the
instrument to service debt obligations.
 Guidance: To the investors/creditors
 Not a Recommendation: No recommendation
to buy, hold or sell an instrument
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5. INTERNATIONAL
RATING AGENCIES
Moody’s Investors Service
(Moody’s)
Standard & Poor’s corporation
(S&P)
Duff and Phelps Credit Rating
Co. (DCR)
Japan Credit Rating Agency
(JCR)
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6. CREDIT RATING AGENCIES
IN INDIA
CRISIL
ICRA
CARE
SMERA
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7. CCRRIISSIILL
 Credit Rating and
Information Services of
India Ltd.
 Jointly promoted by ICICI,
Nationalized and foreign
banks, and Insurance
Companies in 1987.
 Services Offered are :
Rating, Information
Services, infrastructure
and consultancy.
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8. ICRA
 Investment Information
and Credit Rating Agency
of India Ltd.
 Promoted in 1991 by IFCI
& 21 other shareholders
comprising nationalized
banks.
 Services offered are:
Rating Services, Advisory
services and investment
information services.
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9. CARE
 Credit Analysis & Research
 Incorporated in 1992 with the combined efforts of
IDBI, and several other banks & insurance
companies.
 With the rating volume of debt of around
Rs.33,062 bn
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10. SMERA
Small & Medium Enterprises Rating
Agency.
Established in 2005 by SIDBI In
Association Several Banks to Focus On
Rating of Small & Medium Enterprises.
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11. CREDIT RATING
PROCESS
Rating Request
Data Collection
Data Analysis
Meeting with Management
Rating Committee
Communication to the Issuer
Dissemination to the Public
Annual Review
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12. BENEFITS OF RATING
Issuers
 Improves Corporate Image
 Wider Audience For Borrowing
 Helps In Growth & Expansion
o Investors
 Helps In Investment Decision
 Choice Of Instruments
 Save Investors Time & Efforts
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13. RATING GRADES
AAA (Highest
Safety)
AA (High Safety)
A (Adequate Safety)
BBB (Moderate
Safety)
BB (Inadequate
Safety)
B (High Risk)
C (Substantial Risk)
D (Default)
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14. RATING GRADES
 LAAA (highest safety)
 LAA+, LAA, LAA-(High safety)
 LA+,LA, LA-(Adequate safety)
 LBBB+, LBBB, LBBB-(Moderate
Safety)
 LBB+, LBB, LBB-(Inadequate
safety)
 LB+, LB, LB- (Risk Prone)
 LC+, LC, LC-(Substantial Risk)
 LD (Default extremely speculative)
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15. Reference
En.Wikipedia.org/wiki/creditrating
www.crisil.com/ratings/credit.html
www.investopedia.com
www.cibil.com
Credit rating in India.
(Dr.Mamta Arora)
FINANCIAL SERVICES ( 7e )
( M Y Khan )
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