Credit Risk | Credit Ratings | Rating Agencies
the issuer pays all commitments in time,
the issuer pays the dues, but with some delay, and
the issuer does not pay principal and the interest at all.
Credit Risk - Reasons
Intention of the borrower
Ability of the borrower
business stability and profitability of the company.
market leaders may pose a Lower Credit risk
NEW / small-sized company – Higher Credit risk
Credit risk is a Diversifiable risk
Measured by Credit Rating
Credit Rating Agencies
CRISIL
ICRA
CARE
INDIA RATINGS & RESEARCH
Long Term Credit Ratings
AAA – Highest Level of Safety
AA+, AA, AA-
A+,A,A-
BBB+,BBB,BBB-
BB+,BB,BB-
B+,B,B-
C+,C,C-
D
short Term Credit Ratings
Commercial paper, short-term debentures, certificates of deposit, inter-corporate deposits, working capital borrowings, with an original maturity of one year or less
A1+,A1 – Highest Level of Safety
A2+, A2
A3+,A3
A4+,A4
D - Default
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