Global rating agencies
There are a lot of various rating agencies in the world. As a rule, they are all private independent organizations. The crux of suchlike organizations is to assess solvency, debt instruments, market value, quality of asset management, and other important indicators of a company. Besides, based on this data the agencies rate the companies with the credit worthiness grades. Usually, the marking system is letter-based. For instance, the highest rating is AAA. Then the classification goes in the descending order: AA, A, BBB, etc. The lowest level is marked with the letter D and means “default” – inability of a company to repay a given debt. Those business corporations that retain the highest ratings from AAA to BBB are considered to be investment profitable, whereas lower rating reflects the risk of non-payment of a debt obligation. As a result, such a company has to pay out higher interest on loans.
Moreover, the rating agencies can give an outlook of 3 types:
There are more than 100 rating agencies around the world that assign national and global ratings to the companies. Here is a brief description and basic assessment criteria of three most authoritative rating agencies in the world: