Credit Rating Advisory

External credit rating has become an inevitable aspect of the banking system since the establishment of Basel norms, and it can have a substantial impact on a company's borrowings and interest costs. Apart from financials, credit rating agencies consider a variety of additional factors such as country risk, industry profile, competitive scenario, commodity price volatility, vintage, and business competence, among others, which are more subjective than objective. The rating process is an assessment of fundamentals and the probability of changes in fundamentals as a result of changes in external scenarios.

Credit Rating Process:

● Understanding Rating Requirement: Understanding the credit rating criterion and expected outcomes is the first step. The company shares financials, project details, and other necessary information in order to do primary data analysis

● Quantitative Analysis: Historical financial statements and projected financial statements/credit ratios are ascertained that have been adjusted for agency procedures, pressures, and/or business plan scenarios. The findings are presented to management, with any important concerns or areas of ambiguity highlighted and suggestions for improvement made

● Discussion with the management: Clients are given valuable insights that identify areas for improvement. Management is also prepared for rating agency interviews by giving sample questions with key messages that highlight credit strengths and flaws, as well as practice interviews if necessary

● Selection of Rating Agency: A complete track record of sector outlook of various rating agencies and ratings done in the past in the particular sector by rating agencies is maintained

● Preparation of agency submissions: We aid in the production of supplemental documentation to be provided to rating agencies in order for them to form an accurate opinion of the company's creditworthiness

● Coordination with the Rating Agency: We assist clients in presenting and discussing their case against the chosen rating agency. We collaborate with clients to provide all necessary information to rating agencies

● Finalisation of Credit Ratings: We advise clients on whether to contest any aspect of the decision or to accept the outcome and convert to a public rating as necessary

● Monitoring and Road Ahead: Rating is a continuous process that is examined and revisited on a regular basis. We work with clients to develop long-term strategies for maintaining and improving their creditworthiness

We offer enormous value by obtaining the targeted rating upgrades or preventing downgrades. A thorough understanding of credit ratings, the fundamental aspects that influence them, credit problems and credit rating triggers allow for more effective business decisions.