Credit rating, Financial Management

As the number of companies borrowing directly from the capital market increases, and as the industrial environment becomes more and more competitive and demanding, investors find that a borrower's net worth or name is no longer sufficient to ensure successful raising of funds from the market. In such a scenario, to enable the investors to take informed decisions, 'Credit Rating' has emerged as one of the most important financial services. Credit rating provides an impartial and objective opinion on the credit quality of debt obligations of different companies and assists investors, individuals and institutions in making investment decisions.

Credit Rating is defined by some well-known credit rating agencies in various ways.

Credit Rating Information Services of India Ltd. (CRISIL) Rating: "Credit rating is an unbiased, objective and independent opinion as to an issuer's capacity to meet its financial obligations. The CRISIL rating symbols indicate its current opinion in a summarized manner as to the relative safety of timely payment of interest and principal on a debenture, preference share, fixed deposit or short-term instrument."

Moody's Investor Service (USA): "Rating is designed exclusively for the purpose of grading bonds according to their investment qualities."

Standard and Poor's (USA): "A Standard and Poor's corporate or municipal debt rating is a current assessment of the creditworthiness of an obligor with respect to a specific obligation."

Posted Date: 9/11/2012 1:15:38 AM | Location : United States







Related Discussions:- Credit rating, Assignment Help, Ask Question on Credit rating, Get Answer, Expert's Help, Credit rating Discussions

Write discussion on Credit rating
Your posts are moderated
Related Questions
Scenario analysis Your firm, Agrico Products, is considering a tractor that would have a cost of $35,000, would increase pretax operating cash flows before taking account of deprec

What is Average Collection Period Ratio? Please provide me report on Average Collection Period Ratio.

1. Let's look at the cash flow of the volatility (variance) spread swap: - ( σ 2 Nasdaq - σ 2 S & P 500 ) N 2 It is noticeable from this expression that investor

Assignment 2 Decision Tree Assessing Alternatives in Capital Budgeting [see Bailes, J.C., and Nielsen, J.F. (2001, Winter). Using decision trees to manage capital budgets. Manag

A paper mill produces two grades of paper viz., X and Y. Because of raw material restrictions, it cannot produce more than 400 tons of grade X paper and 300 tons of grade Y paper i

Earn out arrangements   Consideration could be delayed and paid only upon achievement of certain criteria. For illustration the predator company may pay additional cash if acq

State the term- Dealing with general risk Part  of  the  strategic  decision  making  process  is  to  analyse  all  risk  factors  involved  with pursuing a specific course of

BFN1014 ASSIGNMENT 2 TRI 2 2012 2013

Q. What is Risk mitigation and how it is monitored? 1. When managing risks, there are several risk strategy options to be considered. Risk may be avoided entirely, transferred

Role of market efficiency: Market efficiency signifies how ‘quickly and accurately' does relevant information have its effect on the asset prices. Depending upon the degree of