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` A credit rating assesses the credit worthiness of an
individual, corporation, or even a country. Credit
ratings are calculated from financial history and
current assets and liabilities.
` A credit rating tells a lender or investor the
probability of the subject being able to pay back a
loan. A poor credit rating indicates a high risk of
defaulting on a loan, and thus leads to high interest
rates.
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` An assessment of the credit worthiness of
individuals and corporations. It is based upon the
history of borrowing and repayment, as well as the
availability of assets and extent of liabilities.
` Credit is important since individuals and
corporations with poor credit will have difficulty
finding financing, and will most likely have to pay
more due to the risk of default.
 |

 
 


 
oodys͛:
͞Ratings are designed exclusively for the purpose of
grading bonds according to their investments
qualities͟.
Australian Ratings:
͚A corporate credit rating provides lenders with a
simple system of gradation by which the relative
capacities of companies to make timely repayment of
interest and principal on a particular type of debt can
be noted͛.
 |

 
 


 
`he ratings are expressed in code numbers which can
be easily comprehended by the lay investors. Credit
rating, as exists in India, is done for a specific
security and not for a company as a whole.
` A debt rating is not one time evaluation of credit
risk, which can be regarded as valid for the entire
life of the security. A credit rating does not create
fiduciary relationship between the agency and the
users
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` Guperior information
` Low cost information
` Basis for proper risk, return & rade off
`Healthy discipline on corporate borrowers
` Formulation of public policy guidelines on
Institutional investment
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`Low cost information

`Quick investment decision
`Independent investment decision
` Investor protection
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`Gources of additional certification
`Increase the investor population
` Forewarn risk Encourages financial Discipline
`erchant bankers job made easy
`Foreign collaborations made easy
`Benefits the industry as a whole
`Low cost of borrowing Rating as a marketing tool
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Excellent AAA AA A BBB BB

Gtrong AA A A- BBB- BB-
Gatisfactory A BBB+ BBB BB+ B+
Weak BBB BBB- BB+ BB- B
Vulnerable BB B+ B+ B B-

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 | 
Î.credit Rating Information Gervices Limited (CRIGIL)
2.Investment Information and Credit Rating Agency of
India (ICRA)
3.Credit Analysis and research (CARE)
4.Duff Phelps Credit Rating Pvt. Ltd. (DCR India)
5.Onida Individual Credit Rating Agency Ltd (ONICRA)
 


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High Investment Grades:
AAA(triple A): Highest Gafety
AA (double A): High Gafety
Investment Grades:
A: Adequate Gafety
BBB (triple B): oderate
Gafety Gpeculative Grades:
BB: Inadequate Gafety
B: High Risk
C: Gubstantial Risk
D: Default
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` ICRA Limited (an Associate of oody's Investors Gervice) was
incorporated in Î Î as an independent and professional company.
` ICRA is a leading provider of investment information and credit rating
services in India.
` ICRA͛s major shareholders include oody's Investors Gervice and
leading Indian financial institutions and banks. With the growth and
globalization of the Indian capital markets leading to an exponential
surge in demand for professional credit risk analysis,
` ICRA has been proactive in widening its service offerings, executing
assignments including credit ratings, equity gradings, specialised
performance gradings and mandated studies spanning diverse
industrial sectors.
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| #|| $
IICRA was set up by Industrial Finance Corporation of
India on Î
th January Î Î. It is a public limited
company with an authorized share capital of Î
crores. he initial paid up capital of Rs. 3.5 crores
was subscribed by IFC, UI, LIC, GIC GBI and others.
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#|| $
Long term Debentures Bonds and Preference shares-Rating
Gymbols
LAAA: Highest Gafety
LAA: High Gafety
LA: Adequate Gafety
LBBB: oderate Gafety
LBB: Inadequate Gafety
LB: Risk prone
LC: Gubstantial Risk
LD: Default,
 

  



# %$
he CARE was promoted in Î 3 jointly with investment companies,
banks and finance companies. Gervices offered by CARE are Credit rating
Information Gervice Equity Research etc
Credit Analysis and Research Limited (CARE) :
Long term debt instruments-Rating Gymbols
CARE AAA: Highest Gafety
CARE AA: High Gafety
CARE A: Adequate Gafety
CARE BB: Inadequate Gafety
CARE B: High Risk
For medium term debt instruments
CARE AAA: Highest Gafety
CARE AA: High Gafety
CARE A: Adequate Gafety
CARE BB: Inadequate Gafety
CARE C: High Risk