Credit Rating Agency


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Credit Rating Agency

A company that provides investors with assessments of an investment's risk. The issuers of investments, especially debt securities, pay credit rating agencies to provide them with ratings. A high rating indicates low risk and may therefore encourage investors to buy a security. Additionally, banks may only invest in securities with a high rating from two or more credit rating agencies. The SEC recognizes 10 firms as credit rating agencies; Fitch, S&P, and Moody's are the three most prominent. However, the methods of credit ratings agencies have been subject to criticism. For example, most agencies gave high-risk mortgage-backed securities top ratings until they defaulted at the collapse of the housing bubble.
References in periodicals archive ?
On September 22, the Senate approved by unanimous consent the Credit Rating Agency Reform Act of 2006.
The credit rating agency sent an email statement to Time saying, "The customer has requested a name change which we are now making.
The independent affirmation of this fact by an international credit rating agency such as CI will not only strengthen our existing relationships but will also open doors to many new relationships across the globe.
The credit rating agency also affirmed its country ceiling at AAA.
Bulgaria's Cabinet has authorized Finance Minister Simeon Djankov to terminate the existing contract with the Japan Credit Rating Agency (JCRA).
If for example, he said, a credit rating agency announces that it will monitor the situation in a certain country stating that it is not certain whether there are negative developments, it works like a self fulfilling prophecy and in the end problems arise in that country because of the reaction following the announcement.
According to the credit rating agency, French insurers are confronted with a series of challenges which the financial crisis has only exacerbated, although the sector has shown some resilience to the economic downturn.
The credit rating agency has even scrapped the credit oversight to which
Monday's fall was triggered by credit rating agency Fitch's decision to downgrade Greece's credit rating to BBB+, the first time in 10 years that a major credit rating agency had rated the country lower than A.
Also, if any additional nonrating services have been provided by the credit rating agency or its affiliates to the registrant or its affiliates over a specified period of time, disclosure of the services and the fees paid for those services would be required.
A credit rating agency is supposed to gauge the creditworthiness of organisations issuing debt instruments such as corporate and government bonds, so that investors, banks, regulators and other market operators can use them to measure relative credit risk.