What Is a Credit Rating Service?

A credit rating agency is an important service intermediary in the financial market. It is an organization composed of specialized economic, legal, and financial experts that grades securities issuers and securities credit. The main objects of securities credit ratings are various types of corporate bonds and local bonds, and sometimes international bonds and preferred stocks. Common stocks are generally not rated.

Credit rating agency

In general,

Internationally renowned investment expert, USA

AAA level: the ability to repay debt is extremely strong, and it is basically not affected by the adverse economic environment.

China

After more than ten years of long-term preparation, the United States

The external legal environment of China's rating market is becoming more and more perfect, and the demand for the rating market is constantly expanding. Rating agencies should seize development opportunities, practice their internal skills, and rapidly improve the level of rating services. For credit rating agencies to survive and develop, the key is to start from the following aspects:

Credit rating agency innovation awareness

The service objects of credit rating are investors, rated enterprises and managers. Credit rating agencies should enhance service awareness, win customers and increase competitiveness by improving the satisfaction of various types of service objects for services. Different service methods can be adopted for different investment objects, such as:

For investors, rating agencies should be based on the principles of "three public and honesty" and stand on the stand of a third party to scientifically and objectively provide investors with the credit rating of the assessed enterprise, and perform dynamic monitoring and timely adjustment. And announce changes in credit rating to provide investors with a basis for decision-making.

For the rated enterprises, the corresponding rating versions can be designed according to the different purposes of the corporate rating, to improve efficiency and effectiveness. In addition, through in-depth research on the industries and products provided by the evaluated enterprises, they can provide valuable management and financial advice, industry analysis reports, etc. for the enterprises.

For managers, it is mainly to provide them with a basis for scientific decisions. Different approaches can be taken for different management departments. For the securities authorities, specific rating methods can be appropriately designed according to the characteristics of the securities being evaluated to improve the reliability of the rating results. For commercial banks, when credit rating agencies rate loan companies, they can conduct joint reviews with commercial banks to jointly control risks.

Collaboration and exchange of credit rating agencies

The credit rating industry is currently very important but also a very small industry in China. It is a typical characteristic of this industry with few employees, miscellaneous institutions, unclear authorities, and lack of an industry management system. Domestic credit rating agencies should strengthen cooperation to jointly discuss such aspects as regulating the order of the industry, improving the rating system, improving the level of rating business, strengthening industry self-discipline, and strengthening communication with government agencies to jointly maintain and cultivate this special industry. In addition, we should also strengthen cooperation and exchanges with foreign credit rating agencies, learn from their excellent practices, learn advanced rating theories and rating systems, and constantly improve their business level and competitiveness through interactions with them, so as to maintain their competitiveness. Healthy development.

Credit Rating Agency Rating System

Whether it is a securities rating, a corporate rating, or a specific credit relationship evaluation, the basis is a set of rating systems, including rating objects, rating content, rating methods, methods and procedures, rating index system and credit rating settings. The rating index system is the soul of the entire rating system, which directly affects the seriousness, authority, and scientificity of credit rating work, and directly affects the vitality of credit rating activities. Doing a good job of the rating index system is one of the key issues for guaranteeing the rating results.

The setting of the index system must be targeted and scientific, and it must be systematic and comprehensive. The specific content involved in different evaluation objects is very different, so different indicators must be designed for different objects. In addition, the content of the rating should examine as many factors as possible that affect the evaluated enterprise, distinguish each factor according to the degree of impact, and make it weight different in the index system, so as to be comprehensive, systematic, and scientific.

The establishment of a scientific indicator system should draw on international practices and practices, and take into account China's specific national conditions. As international outstanding rating agencies have a history of over a hundred years, they have worked out a more scientific rating index system through years of rating activities. We can quote their index rating system, mainly the experience and practices of the United States and Japan. . However, compared with foreign countries, China's enterprise ownership and financial system are different, and the accounting system is also inconsistent. This requires the foreign indicator system to be revised and transformed in accordance with China's specific conditions, and the rating indicator system to be designed scientifically and appropriately. Evaluate the subject.

Credit rating agency team

The establishment of a high-quality workforce is the prerequisite for the smooth development of the rating work, and it is also a necessary condition for improving the quality of the rating. Because the rating work is highly specialized and requires a comprehensive survey of the subject, the rating personnel are required to have multidisciplinary knowledge in management, finance, and statistics. The broader the knowledge of the rating personnel and the richer their experience, the better they can grasp the true situation of the rated enterprise, and the rating results can correctly reflect the reputation of the rated enterprise. As a credit rating agency focusing on knowledge services, talent is the key to its core competitiveness. Therefore, credit rating agencies should absorb talents with a good education background, and conduct business training and business exchanges frequently to create a strong professional team.

Credit rating agencies improve the system

With the increase of credit consciousness, society has become increasingly demanding of the quality of credit products. The quality of rating agencies' ratings is the key to the rise and fall of China's credit rating industry. It is also one of the most important factors determining the survival of credit rating agencies. In the face of fierce international and domestic competition, strengthening the quality control of rating work and improving the quality of ratings is a top priority for any rating agency.

First of all, credit rating agencies should formulate work management specifications, control from all aspects of credit rating, and improve the quality of ratings. For example, in the rating preparation stage, the rating personnel are required to understand the industry status of the rated enterprise, and on the basis of grasping the factors that have an important impact on the industry, put forward the information that the rated enterprise should provide, and list out the field survey Preparations such as questions. In the field investigation stage, through interviews with relevant personnel of the enterprise and field evidence, to grasp the authenticity of the financial data of the enterprise and the management of the business, especially the judgment of qualitative issues should also pay great attention. In addition, if necessary, visit banks and other companies that have business relationships with the company. During the writing of the report, a uniform format may be specified, the rating standards shall be as detailed as possible, and the operability shall be improved. The facts shall be provided with as much basis as possible to avoid arbitrary subjective guessing and ensure that the evaluation is conducted in an objective and fair position.

Second, establish a multi-level review system that separates assessment and review. For example, after the rating personnel makes a rating, it is submitted to the department manager for an initial review. The initial review mainly reviews the basic information and the status of the rating report itself. The review content is mainly whether the content of the rating report meets the actual situation and whether the format is standard. The report that passed the preliminary examination is submitted to the review committee, mainly to review the content and determine the credit rating.

Third, we must combine the quality of the rating report with the assessment of the rating personnel. Through the establishment of an effective quality evaluation system, the rating staff can earnestly carry out the rating work. In order to get good evaluation results, they will also work hard to learn business knowledge, improve their level, and make the quality of rating reports continue to rise.