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Credit Rating Company

In: Business and Management

Submitted By PritomArafat
Words 2113
Pages 9
CRAB Rating Scale
CRAB Long Term Rating Scale
CRAB Short Term Rating Scale
CRAB Long Term Rating Scale
Rating Methodologies:
It’s different for several sectors. Such as several methodologies for bank rating, financial institution rating, corporate rating, general insurance rating, life insurance rating, government owned enterprise rating and securitization rating.
Other services:
1. Grading Services
2. Advisory & Consulting Services
3. Information Service

National Credit Ratings Ltd

National Credit Ratings Limited (NCR) is a credit rating agency in Bangladesh. It was incorporated as a public limited company under the Registrar of Joint Stock Companies in August 2010 and received its certificate for commencement of business in July 2010. It was granted a licence by the Securities & Exchange Commission (SEC) of Bangladesh for operating as a credit rating company in September 2010. The formal launching of the company was held on 18 October 2010.
Managing director & CEO: MD. Momin Ullah Patwary, BP, is a former secretary to the Govt. of Bangladesh.
Services:
The services provide by the agency are followings: Entity Rating, Instrument Rating, Insurance Company rating, Asset Manager Rating, Sectoral Grading and Ranking.
Methodology
A true and fair opinion is our responsibility. NCR gives opinion as to the ability of an entity to meet its financial obligations. The rating process primarily concentrates on business and financial risks. The focus is to assess cash generation capability and its adequacy to meet debt obligations on a timely basis. The analysis attempts to determine the long-term fundamentals and likelihood of change in these, which could affect the credit worthiness of the entity.
The analytical framework of our rating methodology is divided into two interdependent segments. The first deals with the operational characteristics and the second with the financial characteristics. Besides we make use of both the qualitative and quantitative analysis in arriving at the rating opinion. Analysis typically involves at least three years of operating history and financial data as well as forecasts of future performance. To achieve a clearer perspective on relative performance, a company’s performance is compared with that of others in the same industry. In addition a sensitivity analysis is performed to assess a company’s capacity to cope with changes in its operating environment.
The rating accorded is based on numerous factors including, but not restricted to those detailed below:
Operating Environment
The industry’s volatility, its position within the broader economy and effects of economic cycles on the industry. Government regulations, tariff structure; threat from imports; price competitiveness of the domestic industry and pace of technological change; Basis of competition and key success factors; structure of the industry, entry and exit barriers; environmental and political factors.
Entity’s Relative Position:
Size of the entity and market share; Competitive advantages and weaknesses; Relationship with the suppliers and buyers; Diversification of income sources; Technology.
Stand alone Financial Strength
Capital structure, profitability, liquidity position and financial flexibility; Financial projections; Free cash flows and their sensitivity to various economic industrial and business risks over the medium term; Accounting policies and practices.
Quality
Background and history of the sponsors; Corporate strategy and philosophy; Quality of management and management capability under stress; Organizational structure, personnel policies including succession planning.
Rating Methodology:
Different methodologies for different sectors:
Corporate rating methodology Financial institutions rating & Methodology
Bank loan rating methodology Insurance company rating methodology

Emerging Credit Rating Limited

History:
Emerging Credit Rating Limited (hereinafter referred to as ECRL) was incorporated in March 2009, with the view to providing Credit Rating Services in Bangladesh. ECRL is committed to providing Bangladesh’s credit market with independent and prospective credit opinions, research and data. In addition to our core rating business, in the future we hope to branch out into providing research data and analytical tools for assessing credit risk, and publish market-leading credit opinions. The company has been built on a foundation of local market experience, which spans throughout the Corporate sector of the country. The company is headquartered in Dhaka, Bangladesh, with a view to expansion to other financial districts all over the nation. ECRL has established a technical collaboration with a Malaysian Rating Company known as Malaysian Rating Corporation Berhard (MARC), which is also affiliated with one of the top ranking Rating companies in the world “Fitch Ratings”. Under the technical agreement, ECRL shall adopt all the rating methodologies, definitions and symbols of MARC, who implements the standard global practices of its affiliate.
CEO: Mr. Ahsan Parvez is a fellow member of ICAB and was an Articled student of Rahman Rahman Huq, Chartered Accountants (Member firm of KPMG). Prior to joining ECRL he served as the National Financial Controller at DHL. He has a prolific career of 25 years of services in Senior Management positions.
Rating Methodology:
Different methodology for different sectors:
Corporate Debt Rating
1. Rating Process for Construction Companies
2. Rating Process for the Telecommunication Industry
3. Rating Process for the Oil & Gas Industry
4. Rating Process for Property Companies
Financial Institution Rating
1. Rating Process for Financial Institutions
2. Rating Process for Financial Holding Companies
3. Rating Process for Islamic Financial Institutions
General Insurance
Life Insurance
Project Finance
1. Rating Process for Independent Power Producers
2. Rating Process for Water Industry
Issuer Debt Rating
Rating Process Govt Agencies
Bond Rating
Rating Process:

Alpha Rating Company

History:
It was incorporated on the 24th of February 2011. a result of the initiative of a few distinguished and renowned professionals of Bangladesh and the with support and organizational assistance from SATCOM IT Ltd., Axis Resources Ltd., Equity Care Bangladesh Ltd., and TAN Equity and Investment Ltd.
Managing Director: Muhammad Asadullah
Services:
• Corporate Entities Rating
• Financial Institution's Rating
• Insurance Company's Rating
• Sub-National Entities Rating
• Project Finance Rating
Rating Methodology
The rating methodology incorporates quantitative factors.The rating reflects the company’s current financial strength as well as how the financial position may change in the future. In this respect, extensive research on the out look of the sector in which the firm operates is also an integral part of the rating methodology. The ratings are assigned on a national scale and corporations are evaluated in respect to the financial strength of their peers in Bangladesh. Within this context, our analysis takes into consideration the fundamentals of the Bangladesh economy and the key features of the sector in which the company operates. The issuer’s evaluation will also take into account:
• Recent economic developments,
• The quality of economic and financial management,
• The debt and characteristics of the sector,
• Economic stability,
• Political stability and effectiveness of the political system,
• Long-term trends and economic outlook.

A corporate rating evaluation, whether for an industrial company or a company in the service sector, will consider three main areas:
1. Business Risk Analysis
2.Financial Risk Analysis
3. Management/Ownership/Governance Risk Analysis

Rating Scales
1. Long Term Rating Scale
2. .Short Term Rating Scale

Bangladesh Rating Agency LTD
History:
The Bangladesh Rating Agency Limited (BDRAL), an initiative of Dun & Bradstreet South Asia Middle East Limited and nine Banks and Financial Institutions of Bangladesh, aims to provide credit rating service for the Small and Medium Enterprises of the country – the thrust sector of the economy. BDRAL is the country’s first rating agency that focuses primarily on SMEs and was accorded Credit Rating License by the Securities and Exchange Commission of Bangladesh(SEC) in March 2012 to commence SME Ratings.
With the strong impetus of Bangladesh Bank which is encouraging the local banks and FIs to enhance and ensure increased target oriented disbursement of funds to the SME sector, BDRAL’s SME Ratings aim to address the multi-faceted challenges faced by Banks in SME lending by providing ratings that are comprehensive, transparent, and reliable thus facilitating greater and easier flow of credit from the banking sector to the SMEs.
CEO: Tarique Afzal
Methodology:
The Bangladesh Rating Agency Limited (herein after referred to as “BDRAL”) rating frameworks considers a number of financial and non financial parameters of the enterprise and regulations and industry specific dynamics. BDRAL believes that the industry in which a SME operates has a direct bearing on the overall performance of the SME and therefore rates SMEs based on industry benchmarks. BDRAL Rating is a comprehensive assessment of the enterprise taking into considerations the overall financial and non financial performance of the subject company vis à vis the other peers in the industry in the same line of business and size criteria.
Based on its assessment and understanding BDRAL has developed rating methodology framework which mainly addresses the following areas
1. Industry Risk
2. Business Risk
3. Management Risk
4. Financial Risk

Rating Parameters:

ARGUS Credit Rating Services Ltd

Introduction:
ARGUS Credit Rating Services Ltd. (ACRSL) is the next-generation Credit Rating Agency of Bangladesh. Founded as a joint-venture between global experts in credit & equity research and local sponsors with strong capital markets track record, ACRSL received its license from the SEC in 2011.
Their Services:
We provide a host of services, including Credit Rating, Credit Advisory, Project Feasibility, Credit Research that together evaluate and quantify credit and business risks associated with following clients and instruments:
Corporate & Entity:
Banks, NBFIs, Insurance companies, Manufacturers and other corporate.
Financial Instruments:
Various capital raising instruments including bonds, preference shares, derivatives, securitized bonds.
Bank Loan & Facility Rating:
For the corporate houses seeking bank loan and facilities above certain amount credit Rating is becoming a requirement.
Project Financing Rating:
A project’s ability to service long term debt for sectors such as real-estate, manufacturing, power, and infrastructure.
SME Rating:
Requires special expertise and methodology, which is provided by our international partner and affiliation, DP Information Group with 30 years of SME Rating experience in Singapore and emerging Asia.
Credit Advisory service
The service includes a in depth analysis of company’s financials, overview of management and growth potential, identifying the major challenges and opportunities, preparing information memorandum of the company for availing investing facility and also provide a tentative view on the credit rating of the company.
Company profiling
Prepared a brief profile of the company and published the list so that the company can use this as a promotional tool.
Project Feasibility Study:
Project Feasibility Studies which include technical and financial feasibility, regulatory and compliance aspects identification , risk identification & mitigations etc.
Rating Methodology
The methodologies have been designed after due consideration to the specific insights of each sector with appropriate weightage to both qualitative and quantitative factors of each sector. The qualitative and quantitative factors are converted to specific traits with appropriate weightage for highest performance, lowest performance, industrial average etc. to arrive at a meaningful rating of an organization. We have designed the specific rating methodology for specific sectors.

WASO Credit Rating Company (BD) Limited

History:
WASO Credit Rating Company (BD) Ltd. (hereinafter referred as "WASO") started its journey on 15th February, 2012 with the license of Securities and Exchange Commission (SEC) having the technical collaboration with Financial Intelligence Services Ltd. (FISL), Hong Kong. FISL is the Hong Kong based rating wing of World' vest Base,(WVB) USA which is renowned for its unsolicited rating approach and unique rating model. Its comprehensive financial database spans over 51,000 public companies in more than 130 countries from Asia, Africa, Australia, Europe, Latin America and North America placed it in a unique position among the global financial intelligence service provider companies. Through technical agreement with FISL, WASO created bondage with global resources hub in providing the best judged opinion through rating services to the national financial sector. WASO envisaged to offer both rating and related services with a vision to establish a national risk management platform for the financial and non-financial sector. WASO is in the process of recognition of External Credit Assessment Institution (ECAI) from Bangladesh Bank.
Managing Director: Engr. Abdul Wadud, FIEB

Rating Services:
Issuer/Entity Ratings:
For Corporate, Banks and Financial Institutions
Issue Specific Rating: It can be in both form short term and long term as following:
Long Term Ratings:
For Bonds, Debentures, Structured Products, For Tier II and Tier III Capital of Banks, Mutual Fund Ratings
Short Term Ratings:
For Commercial Paper, CDs of Banks and Corporate House
Bank Loan/Facility Ratings:
Bank Exposure rating under Basel II requirement for corporate, SME, MFIs and others
Claim Paying Ability Rating:
For General Insurance and Life Insurance Companies
Due Diligence Service:
For Project Finance, Corporate Restructuring, Amalgamation, acquisition/absorption, and Reconstruction
Accreditation Service:
For Valuation Agencies, Third Party Agencies like CPV Agencies
Rating Policy:
1.1 Meaning of WASO Rating
1.2 Rating Request
1.3 Rating Declaration
1.4 Review Appeal Process
1.5 Ratings Surveillance
1.6 Ratings withdrawal & Suspension
1.7 Ratings Release
1.8 Confidentiality of Issuer information
1.9 Unsolicited Rating Policy
1.10 Whistle-blower Policy
1.11 Recognition of Default

Rating Process:

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