Determine the method of credit rating, Financial Management

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Determine the method of Credit Rating

It is obligatory for the issuing companies to get credit rating done on debt securities issues. Credit ratings are also required for Commercial Paper and Fixed Deposits issues of the companies.  Ratings reflect the probability of companies going into default. The higher the rating, the lower the risk of default which is associated with the issue. This also has an effect on the rate of interest offered on issue. Methodology and the rating symbols remain same as in money market securities.

 


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