Rating agencies. What are rating agencies? Leading rating agencies in the world

Rating agencies(RA) - organizations specializing in assessing the creditworthiness of issuers and the investment quality of issued securities. Agencies assign credit ratings based on their research.

In order to use the ratings correctly, it is necessary to understand what the agencies evaluate when they are set, first of all, the probability of non-payment of the debt. At the same time, the ratings do not reflect a number of other factors that may be important for the borrower in the future, such as changes in the economic environment or problems with current liquidity.

RAs do not provide guarantees for the results of their research and do not disclose the methodology used in full.

Rating assignment is a commercial service. Its customers are states, companies, financial institutions. The presence of a rating gives issuers the opportunity to offer their securities to a wider circle of investors, reduces interest rates, and also makes the borrower known and affects his reputation.

Thanks to the ratings, investors can get an independent opinion on the possibility of investing funds, reduce risks, compare securities in terms of risk-reward ratio. At the same time, agencies monitor the solvency of borrowers not only at the time of assigning a rating, but also during the entire period of cooperation, therefore investors have access to information about the reliability of their investments in fact in real time.

However, the disadvantage of RAs is that their data is often late. Their unconditional failure was that they could not warn investors in time about problems in companies such as AIG, Enron, Lehman Bros., Parmalat, etc. financial difficulties and even caused the crisis in the American real estate market. It was then that for the first time a number of leading investors had doubts about the professional competence of the RA.

It is believed that the main reasons for agency failures were: slow response rates to events, assumptions used in the methodology between the agencies themselves, as well as conflicts of interest when the rating is paid by the government or a client company interested in a positive assessment.

Historically, internationals are registered in the United States. This is due to the fact that American investment funds are considered the largest participants in the capital market.

As for national RAs, it is believed that they can better take into account local specificities. The most famous Russian agencies are ", Moody" s Interfax Rating Agency, AK & M,.

See what "Rating agencies" are in other dictionaries:

RATING AGENCIES- (eng. rating agencies) - international and national analytical services that compose integral risk indices of economic entities according to the degree of reliability as borrowers. R. a. assess the reliability of various kinds of debt obligations ... ... Financial and credit encyclopedic dictionary

International rating agencies- (International rating agencies) Rating agencies are an organization that assesses the solvency of financial market entities International rating agencies: country credit ratings, Fitch Ratings, Moody s, S&P, Morningstar, ... ... Investor encyclopedia

Credit rating and world rating agencies- The international rating agency S P for the first time in history downgraded the US credit rating from the maximum AAA to AA +; this event occurred after the prevention of a possible default in the United States. The credit rating is an independent and reliable ... Encyclopedia of Newsmakers

- (RA) - four agencies created in Russia and accredited by the Ministry of Finance of Russia along with the “big three” international rating agencies: Expert RA, National Rating Agency (NRA), AK&M, RusRating. Besides, in Russia ... ... Banking encyclopedia

European debt crisis- This article describes current events. Information can change rapidly as an event unfolds. You are viewing the article as of 14:59 on December 13, 2012 (UTC). (... Wikipedia Wikipedia

Coupon- (Coupon) Coupon concepts, types of bonds, bond market Information about the concept of a coupon, types of bonds, bond market Contents Contents Types of bonds bonds General characteristics and classification of bonds Corporate bonds ... ... Investor encyclopedia

National rating agency- This article should be wikified. Please, arrange it according to the rules of article formatting ... Wikipedia

“One American journalist once said that if earlier it was necessary to introduce tanks, now it is enough to lower the rating to the state, and it will be almost the same blow to the country” (Pavel Samiev, Deputy General Director of the Expert RA rating agency)

What are rating agencies?

Rating agencies are commercial organizations that assess the solvency, debt obligations, and other important financial indicators of issuers. They present their assessment in the form credit ratings, which are assigned to organizations, regions, countries, depending on their creditworthiness. The main purpose of such ratings is to provide their assessment of the likelihood of potential investors / creditors that the issuer will / will not fulfill its obligations.

The most famous and reputable rating agencies in the world are American agencies Standard & Poor "s, Moody" s, and Fitch Ratings... Their history goes back about 100 years. Russian ratings go back to the 90s and the largest are the Expert RA Rating Agency and the NRA (National Rating Agency).

Agency credit ratings have a similar concept, but different designations and calculation methods. Basically, the ratings are indicated in Latin letters in decreasing order of the reliability level from A to C (for some agencies, up to D).

Rating agencies are accredited by the Ministry of Finance of the Russian Federation. In total, there are 8 officially accredited agencies in Russia, 3 foreign: Standard and Poor "s, Moody" s, and Fitch Ratings, one joint: RA MUDIS INTERFAX and 4 Russian agencies: National Rating Agency, Expert RA, RA "Analysis, Consulting and Marketing", "Rus-Rating".

The advantage of foreign agencies is their impartiality and great authority. The advantage of Russian agencies is their efficiency, seeing the situation from the inside, they can react faster and change the rating of Russian companies. Western agencies usually look at IFRS, which are published quarterly / annually, while Russian agencies look at the reports of some issuers on a monthly basis.

How can a private investor use information from rating agencies?

It should be remembered that credit ratings are not a direct recommendation for buying or selling securities. They reflect only one of the aspects necessary for making an investment decision, namely, creditworthiness. Companies with the highest AAA rating can have problems and default. However, if there are only a few such cases among companies with a AAA rating, then companies with pre-default ratings will have hundreds and thousands of such cases of bankruptcy.

Rating agencies continue to have a significant impact on the financial markets. For example, the decision of Standard and Poor's to downgrade the US credit rating in August 2011 from the maximum AAA to AA + caused panic on stock exchanges and a collapse of quotations around the world.

Follow the latest news from leading rating agencies on our.

Credit ratings, being the main instrument for assessing the debt market, are used by investors around the world in order to assess the solvency of securities, businesses, cities and even entire countries. An upgrade or downgrade of the rating is a significant signal to investors about how much the risk for certain assets has changed. Based on the ratings, investment funds form their portfolios, banks determine interest rates on loans for large companies, and insurance companies calculate their reserves.

Credit ratings are formed by special rating agencies... Today in the world there are about 100 different rating agencies, which can be divided into international and national. The most famous and influential international agencies are the Big Three: Standard & Poor's, Moody's and Fitch Ratings, which account for over 95% of all debt ratings in the world.

A rating is assigned to an issuer or security on a commercial basis. The customer of the service can be a state, a company, or financial institutions. The presence of a rating gives issuers the opportunity to offer their securities to a wider range of investors, reduces interest rates, and also makes the borrower more famous and affects his reputation.

Investors, thanks to the ratings, can obtain an independent assessment of the reliability of certain securities, compare them with each other in terms of the risk / return ratio, and also receive prompt information about the deterioration or improvement of the issuers' condition, which reflects the change in the rating.

In Russia, credit ratings are used for the following regulatory purposes: the Central Bank's Lombard List, investment of pension savings, calculation of insurance reserves of insurance companies, investment of military mortgage funds, placement of funds of state companies, determination of guarantees for loans to agricultural enterprises, calculation of own funds of management companies, NPFs, professional participants and insurance companies.

Until 2017, for regulatory purposes, the international scale was mainly used, which was formed by the “big three”. However, after the "sanctions war" of 2014-2015, when all three agencies simultaneously downgraded Russia's rating to speculative, it was decided to abandon this practice in order to reduce dependence on external risks. Since April 2017, S&P, Moody's and Fitch have been represented in Russia as branches, and their ratings can be used by foreign investors.

Since January 1, 2017, the activities of credit rating agencies (CRA) in Russia are regulated by Federal Law 222. According to this law, the national rating scale takes precedence over the international one, and only it is used for regulatory purposes. All organizations that work with public funds are required to obtain a rating on this scale from one of the agencies included in the special register of accredited KRAs compiled by the Central Bank.

As of today, only two agencies are included in the KRA register - "ACRA" and "Expert Ra". They assign ratings to constituent entities of the Russian Federation, issuers of securities from the corporate and financial sectors of the economy, as well as bond issues within the framework of structured finance.

"ACRA"- Analytical credit rating agency. It was established on November 20, 2015 after the approval of 222-FZ with the aim of creating a rating agency, the methodology of which would be trusted by Russian financial institutions. 27 Russian companies and financial institutions with equal shares of 3.7037% of the authorized capital, which amounted to more than 3 billion rubles, became ACRA shareholders. generally. The list of shareholders can be found on the agency's official website.

"Expert RA"- a rating agency founded in 1997. In December 2016, it was included in the register of credit rating agencies of the Bank of Russia. Expert RA uses 16 methodologies for assigning credit ratings, 11 of which are recognized by the Bank of Russia as fully complying with the requirements of Law 222-FZ and can be used for regulatory purposes. These are methodologies for assigning credit ratings to banks; regional and municipal authorities of the Russian Federation; non-financial companies; holding companies; project companies; leasing companies; microfinance organizations; financial companies; the methodology for assigning credit ratings to debt instruments, as well as the methodology for assigning financial strength ratings to insurance companies and insurers specializing in life insurance. In addition to rating activities, the agency conducts various studies of the banking sector, leasing markets, factoring, insurance, MFOs, NPFs, etc.

* Assumes commercial, economic and financial terms

The Expert RA rating agency also sets forecasts for all current credit ratings of banks.
Forecast means the Agency's opinion on a possible change in the rating level in the medium term.

Types of forecasts:

- Positive outlook: there is a high likelihood of a rating upgrade in the medium term
- Negative outlook: there is a high likelihood of a rating downgrade in the medium term
- Stable outlook: the likelihood of maintaining the rating at the same level in the medium term is high
- Evolving forecast: in the medium term, 2 or more options for rating actions are equally probable (maintaining, increasing or decreasing the rating)

In addition to the two agencies and branches of the “Big Three” accredited by the Central Bank, three other major rating agencies operate in Russia. These are the National Rating Agency (NRA), Rus-Rating and AK&M.

The National Rating Agency has existed since 2002. From January 13, 2017, it stopped assigning credit ratings. Currently, it continues to assign and update non-credit ratings, such as ratings of reliability, quality of services, quality of corporate governance, quality of risk management, attractiveness of employers and others.

The AK&M rating agency has existed since 2005. It traces its history from the rating center of the AK&M information and analytical agency, which has been forming ratings since 1994. Since January 13, 2017, it has continued rating activities that are not related to the assignment of credit ratings.

BCS Express

The credit rating reflects the risk of non-payment of debts; a higher rating corresponds to a lower investment rating. Based on the results of their research, rating agencies assign a rating to a particular company, while the rating is far from always being objective.

Investment ratings are considered from AAA to BBB. Ratings below these are considered junk ratings. Junk-rated companies receive less investment and have less cash invested in their securities.

The main disadvantage of such assessments of the efficiency and solvency of an enterprise is the complete lack of guarantees for the results of research, especially since rating agencies do not disclose all information.

The negative outlook suggests that negative changes are likely in the company and the final rating may be revised downward.

Positive - the possibility of positive changes is likely, the current rating may be revised upward.

The assignment of ratings is a commercial service. The main customers of the rating agencies are states, companies and banks. Having a good rating helps a company increase the value of its securities and attract investment. The rating forms the reputation of an enterprise, company, bank and the country as a whole.

Often, ratings compiled by reputable rating agencies are lagging behind. They failed to warn investors about the problems in the largest companies, such as: Parmalat, Enron, AIG and others. As a result, the United States changed its legislation in order to reduce dependence on rating agencies when making investment decisions.

The main disadvantages of these organizations are: slow speed of reaction to current changes in market conditions, outdated forecasting methodology, high competition between rating agencies themselves, conflicts of interest and a high number of customized ratings.

Currently, there are about a hundred rating agencies operating in the world. The most authoritative of the international ones: Moody's, Standard & Poors, FitchRatings.

What is a credit rating?

Agency analysts, based on a variety of information sources, compose credit ratings , exposing the issuer of debt obligations a kind of assessment of solvency. Those. credit rating - this is this assessment, "compressed" in a short letter expression with a certain financial meaning. The higher the credit rating, the more reliable the investment object, but also the lower its potential yield on debt instruments (bills,).

World rating agencies

There are three generally recognized rating agencies in the world market today, which cover about 95% of the market:

Standard & Poor's

Moody's Agency

Fitch Agency

• international, according to which issuers of debt obligations are compared with other countries or foreign companies;

• national, which compares issuers within one country

Depending on the term of the creditworthiness forecast, a long-term rating (long term, for a period of more than a year) and a short-term rating (short term, less than a year) are distinguished. The latter is associated with the long-term and changes (increases or decreases) synchronously with it.

And finally, there are types of ratings in foreign (foreign) and local national (local) currencies. They may differ for one issuer if there are different conditions for fulfilling obligations in the national currency relative to foreign ones.

S&P credit rating

The rating value ranges from the best 'AAA' to the worst 'D'. The letters "+" or "-" (plus / minus) can be added to the letter designation from "АА" to "ССС". They reflect the slightly better or slightly worse position of the issuer within one rating position. For example, an AA + rated issuer is slightly more reliable for an investor than an AA rated issuer. Accordingly, the issuer "AA-" is less reliable for investments than "AA".

• positive (Positive) rating value can be increased;

• negative (Negative) - decreased;

• stable (Stable) - the value will most likely not change;

• developing (Developing) - the value can be either increased or decreased.

The forecasting horizon is from 6 months to 2 years.

S&P rating scale

• investment category (stable, successful issuers or securities);

• speculative (more risky group of issuers); ratings of this group are sometimes called "junk".

Alphabetic and alphanumeric (A-1, A-2, A-3, etc.) designations in brackets refer to the short-term rating scale. Instead of the last two lines, other designations can also be specified:

• R - due to the unfavorable financial condition, the issuer is under the supervision of regulators, which may decide in favor of the advantage of fulfilling one obligation over others;

• SD - the issuer cannot repay one obligation or category of obligations, but repays others;

• D - the issuer is unable to fulfill all or almost all of the obligations.

How do I know the rating calculated by the S&P?

On the website of this agency:

http://www.standardandpoors.com/home/en/us - English version;

http://www.standardandpoors.com/home/ru/ru - Russian version

On the main page on the left there is a search bar, under which you must select a search parameter:

• the name of the country or organization ("entity");

• the ticker of a security ("ticker");

• security code (CUSIP, CINS, ISIN).

After that, you need to enter the required name in the search bar and select the desired name from the proposed pop-up options. If “NR” appears on the issuer, it means that no rating has been assigned. However, upon the first call, the system will require registration:

After going through the easy procedure and receiving a confirmation letter to the specified email address, you can enter the name of the organization of interest to us in the search box (“Find a Rating…” field). If we search for Broker Interactive Brokers, we see the following results today:

Local Currenty LT and ST stand for the long-term and short-term rating of the broker in local currency, while Local Currenty LT and ST stand for the same ratings in foreign currency. The table shows that the broker is highly reliable with a slightly higher short-term rating, as well as a stable long-term forecast (penultimate column of CreditWatch / Outlook) made at the end of 2014. And here are the data for today for the Russian Federation:

As expected, the country's rating in the national currency (rubles) turns out to be noticeably higher than in foreign currency (primarily in dollars). In addition, it can be seen that, according to the agency, the creditworthiness of the broker considered earlier is higher than that of Russia as a whole - if the dollar is chosen as the common denominator. We periodically raise the question of the political bias of such ratings - I personally think they are quite objective and based both on historical data (remember the default in 1998 or the recent December 2014) and on the real state of affairs (Russia's dependence on oil, see).

Probability of default on corporate bonds for 1981-2013 as a percentage:

Credit rating agency Moody's

The numbers 1,2,3 may be added to categories from "Aa" to "Caa". The one “says” that the issuer is in the top line in its rating category (for example, “Aa”). Two is in the middle. Three - at the bottom of the rating category. This rating is designated as follows: for example, "Aa1", "B2", "Caa3".

In addition to calculating the value, the agency also provides a long-term and short-term rating forecast - as does the S&P.

The short-term rating, other than indefinite NP (refusal to assess short-term creditworthiness), can range from P-1 (Prime-1, excellent ability to repay short-term obligations) to P-3 (Prime-3, acceptable ability to repay short-term debt). In relation to the above table of Moody’s long-term liabilities rating, all Prime values ​​quoted fall into the investment category, i.e. with an issuer rating of at least Baa.

How to find out the rating calculated by Moody’s?

https://www.moodys.com/ - English version;

https://www.moodys.com/pages/default_ee.aspx - Russian version

The search field is located on the main page of the site in the upper left part. In this field, you must enter the name of the country or company you are looking for, or the ticker of the security. After that, a drop-down list of the most suitable options will be displayed. By clicking on the required one, we automatically go to the page with the ratings of the required issuer. The very first in the formed list is the long-term rating in foreign currency.

If a user of the agency visits the site for the first time, in order to search for a rating, as in the case of the S&P, it will be necessary to register once, including by checking the box "I agree with the terms of use of the site." I managed to do this only by scrolling the agreement to the end. After filling in a few lines and confirming your registration by e-mail (by clicking on the link), you will be automatically redirected to the Moody’s website under your username. If this did not happen, then the login should be the specified email. Let's look for the rating of the Russian Federation:

From this it can be seen that Russia's long-term rating for liabilities in foreign currency is designated as Ba1, i.e. stands just on the verge of an investment and speculative category. At the same time, the short-term rating has not been determined, the specified forecast is negative, which is quite different from the stable forecast from the S&P (although both were made in 2016 with a difference of about six months). In total, despite the many evaluative parameters, the ratings are relatively subjective. However, for Moody's, a convenient indicator is to view the rating history of the issuer, for which you need to switch to the "Rating" tab:

Here you can see how, having dropped to the default level in 1998, Russia's long-term rating in the national currency began to grow from 2000 to 2009, which was caused by an increase in oil prices. Its stabilization at high levels by 2010 also stopped Russia's rating, and the fall in the price of a barrel, together with the devaluation of the ruble in December 2014, led to a slight downgrade of the rating. “Domestic” refers to the internal rating in the national currency, “Foreign” - in the foreign currency. Senior Unsecured can be translated as senior unsecured debt: in local currency or foreign currency, respectively. In total, you can select and see 5 types of ratings at once - but they are close to 100%, so I will limit myself to those shown in the picture. Pressing " Issuer Outlook ”, you can also see the history of the company's forecasts for the future issuer rating. In the case of foreign issuers, the English version may sometimes be more productive.

Fitch Ratings Agency Credit Rating

The rating scale of this agency is similar to the S&P scale and has an alphanumeric designation. A “+” or “-” sign is added to ratings from “AA” to “B”. Information about the rating of a particular issuer can be found on the following sites (after registration):

https://www.fitchratings.com/site/home - English version

http://www.fitchratings.ru/ru/ - Russian version

Let's choose the Russian-language version. As in previous cases, you must go through the formal registration procedure by clicking on "Create Account". There are several more fields to fill out here than in previous systems, but it's not difficult to deal with them - the data is not checked, so you can write any phone numbers and home address (unlike email, which will receive confirmation). Having filled in everything and putting two check marks at the bottom, we receive a confirmation letter on our mailbox and click on the link in it. Then you can return to the main page and enter your username and password in the upper right corner. After entering the system, we will try to find the rating of Russia there, entering “russia” - unlike S&P and Moody’s, there are no pop-up tips here yet. We get the following results:

In fact, the Fitch agency is the only one of the three that allows you to search in Russian as well - i.e. in the search bar, you can also type "Russian Federation". Although to search for the rating of foreign issuers it is better to use the English-language version of the site (the item "Issuers" there will correspond to " ENTITIES "- but in general, according to my observations, of all three systems, this is the most capricious in displaying information)... Click on the lowest issuer:

As you can see from the table, the rating description is in Russian. The first two lines indicate liabilities in foreign currency, the first line can be considered the most important for evaluating the issuer. By clicking on the "Rating history" at the bottom right, you can see the history of assigning a rating to the issuer (similar to Moody’s, only there the history is presented in the form of a graph). The forecast for the issuer is indicated as a colored icon to the right of the rating value:

Those. for Russia, Fitch has a stable forecast for today. Letter designations can be deciphered as follows:

In parentheses, as before, the short-term rating is indicated.

Comparison of ratings of world agencies

Above, we have considered the three most popular world agencies that assign their ratings. The importance of this action can hardly be overestimated - millions of investors and multibillion-dollar capitals are guided by them. And although in the estimates, and especially in the forecasts, the data of the agencies may differ from each other, the discrepancies with respect to large issuers are almost never significant. At the end of the article, I draw a table of correspondence between the ratings of all three agencies relative to each other: