PRESENTATION ON

INTERNATIONAL CREDIT
RATING
GROUP MEMBERS
• AARTI THAKKER 11

• CHARMI PASAD 12

• SHWETA PRABHU 37

• SHRADDHA KEDAR 41

• VEENA KAMBLE 42

• PRADEEP TIRMARE 50
 Acknowledgment

We would like to place a vote of thanks

towards our Prof. S. Krishnan for his support.
It is due to his help that we were able to glean
the insights in the project of International
Credit Rating. Without his guidance it would
not have been possible for us to make this
project.
 INTERNATIONAL CREDIT
RATING
 A credit rating is a simple number which many
lenders use to determine whether or not they will give
a loan or line of credit to an individual
 There are three main agencies lenders go to in order
to acquire an individual's credit rating: TransUnion,
Equifax, and Experian
 The formula used by these three agencies is known as
FICO, named after the Fair Isaac Credit
Organization
 CREDIT RATING AGENCY

 A credit rating agency (CRA) is a company that assigns credit

ratings for issuers of certain types of debt obligations as well
as the debt instruments themselves.
 A credit rating for an issuer takes into consideration the
issuer's credit worthiness (i.e., its ability to pay back a loan),
and affects the interest rate applied to the particular security
being issued.
 In contrast to CRAs, a company that issues credit scores for
individual credit-worthiness is generally called a credit
bureau or consumer credit reporting agency
 USES OF RATING AGENCY

Ratings used by bond issuers

Ratings used by
government regulators
Ratings used in
structured finance
CRITICISM OF RATING AGENCIES

 Credit rating agencies do not downgrade companies promptly

enough
 Large corporate rating agencies have been criticized for
having too familiar a relationship with company management
 The lowering of a credit score by a CRA can create a vicious
cycle
 Agencies are sometimes accused of being oligopolists
 It has also been suggested that the credit agencies are
conflicted in assigning sovereign credit ratings
TYPES OF RATING AGENCIES

Moody international
group
Fitch group ratings
Standard and poor
Morning star
 Fitch Group Rating

• Fitch Rating

• Long-term credit ratings:-

 Investment grade
 Non-investment grade

• Short-term credit ratings

 Fitch Group Rating

Summary of Primary Scales

• International Issuer and Credit Rating Scales
• Recovery Ratings
• Other International Credit Ratings
• National Credit Ratings
• Country Ceilings
• Additional Usage of Primary Credit Rating Scales
Standard and poor
• Stock market indices
• Short-term issue credit ratings
• Non-Investment Grade
• Investment Grade
• Long-term credit rating
• Credit ratings
• Corporate history
Moody international group
• History
Established in 1911
The first international office in
Japan in 1948
Expansion in Europe in 1960
• Services
technical inspection services
technical training
technical staffing services
 Morning star

• Businesses

• History

• Corporate Identity
 COMING COLLASPE OF
INTERNATIONAL RATING AGENCIES

 The problem, the challenge, the scandal, is not

that the bond insurers are about to be
downgraded

 The real scandal lies in the fact that they

haven't been downgraded a long time ago -
and much deeper than from "AAA" to "AA".
 COMING COLLASPE OF
INTERNATIONAL RATING AGENCIES

• Why Downgrade the Ratings Agencies?

• The Upshot

• Interest Rates Will Have to Rise

CONCLUSION