Credit ratings are forward looking opinions about an issuer’s relative creditworthiness. They provide a common and transparent global language for investors to form a view on and compare the relative likelihood of whether an issuer may repay its debts on time and in full. Credit Ratings are just one of many inputs that investors and other market participants can consider as part of their decision-making processes.
Why are credit ratings useful?
Credit ratings help facilitate an efficient capital marketplace. They provide transparent third-party information that’s not only forward-looking, but standardized for consistency.Learn more about Credit Ratings
— Optimize the cost of funding— Expand the pool of investors and available capital— Lengthen the terms of financing— Diversify funding sources
— Benchmark the relative credit risk of different debt issues— Set the initial pricing for individual debt issues they structure— Determine the interest rate issues will pay— Package assets into securities or structured finance instruments to market to investors
— A third-party opinion of credit quality— A basis for comparison across asset classes, geographies, and peers— Information and metrics to make informed decisions, such as supplementing their own credit analysis or establishing thresholds for credit risk and investment guideline
*We generally provide the issuer with a pre-publication rationale for its credit rating for fact-checking and accuracy purposes.
How We Track Our Ratings
We continuously work to refine our ratings to uphold the highest level of excellence. To measure performance, we conduct studies that assess how much a rating has moved up or down over a given period of time, also known as its transition rate.
Transition rates can also be helpful to investors and credit professionals because they demonstrate relative stability and volatility. For example, investors who are obligated to purchase only highly rated securities may review the history of transitions and defaults as part of their research.
In addition, we conduct studies that track defaults across various industries, providing a fuller credit picture for analysts.
Jon Manley (Americas, EMEA), + 44 20 7176 3952
Ritesh Maheshwari (APAC), +6562396308
Christina Twomey (Global), + 1 (212) 438 0967
Jeff Sexton (Americas), + 1 (212) 438 3448
Michelle Lei (APAC), + 861065692961
Michelle James (EMEA), + 44 20 7176 1297
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