CREDIT RATING

Presented By: Sumit

Roll no:- 14104024

Class: MBA (Finance)

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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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CREDIT RATINGCREDIT RATING

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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CREDIT RATINGCREDIT RATING 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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INTERNATIONAL RATING AGENCIESMoody’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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CREDIT RATING AGENCIES IN INDIA

CRISILICRACARESMERA

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CRISILCRISIL 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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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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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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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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CREDIT RATING PROCESS

Rating RequestData CollectionData AnalysisMeeting with ManagementRating CommitteeCommunication to the Issuer

Dissemination to the PublicAnnual Review11

BENEFITS OF RATINGIssuers Improves Corporate Image Wider Audience For Borrowing Helps In Growth & Expansiono Investors Helps In Investment Decision Choice Of Instruments Save Investors Time & Efforts

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RATING GRADESAAA (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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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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Reference

En.Wikipedia.org/wiki/creditratingwww.crisil.com/ratings/credit.htmlwww.investopedia.comwww.cibil.comCredit rating in India.

(Dr.Mamta Arora)

FINANCIAL SERVICES ( 7e ) ( M Y Khan )

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