Credit Rating Agency

(redirected from Credit Ratings Agencies)

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 ?
para]]Coverage from Local Credit Ratings Agencies in China, Japan, India, Indonesia, Malaysia, Pakistan, Sri Lanka, South Korea, Taiwan and Thailand now available on one platform[[/para]]
As a result of a series of recently completed commercial agreements with local credit ratings agencies in East and Southeast Asia, subscribers to the S&P Capital IQ desktop can now access research, ratings, insights and recommendations from over 400 sell side, industry or specialty firms that cover more than 28,000 public and private companies throughout APAC.
In his new role, Boyce-Valentine will work with the banks' clients to help them optimise their financing structures and assist them in working with credit ratings agencies.
A downgrade by one of the big three credit ratings agencies would drive up the UK's borrowing costs, potentially jeopardising the Government's deficit reduction plans, the paper said.
Other countries had been downgraded by credit ratings agencies without any "noticeable impact" in the markets, he pointed out to the Treasury Select Committee.
The financial crisis has shattered the myth that the judgement of credit ratings agencies is impeccable and has brought the dangers for investors of being "blindly" and "uncritically reliant" on their findings to the forefront.
Credit ratings agencies are not necessarily credible but unfortunately the markets follow their forecasts, Nobel Prize laureate Christopher Pissarides stated today.
For some observers, credit ratings agencies are an obvious suspect.
However, the new law presents a host of new requirements and legal uncertainties that credit ratings agencies such as A.
Investors planning to bid on OneMain Financial, a unit of Citigroup, Inc (NYSE: C) that the parent company is looking to sell, are waiting to see the reviews of the unit by credit ratings agencies.
Today, the value of credit ratings has been significantly diminished and the SEC has the authority to confront the situation head on and hold the credit ratings agencies accountable," said Kaitz.
Recognizing that the credibility and reliability of credit ratings is heavily dependent on issuers providing accurate and adequate information to the credit ratings agencies, the Issuer Code of Standard Practices outlines issuer obligations in the credit rating process.