Credit Risk | Credit Ratings | Rating Agencies

the issuer pays all commitments in time,
the issuer pays the dues, but with some delay, and
the issuer does not pay principal and the interest at all.

Credit Risk - Reasons
Intention of the borrower

Ability of the borrower
business stability and profitability of the company.
market leaders may pose a Lower Credit risk
NEW / small-sized company – Higher Credit risk

Credit risk is a Diversifiable risk
Measured by Credit Rating

Credit Rating Agencies
CRISIL
ICRA
CARE
INDIA RATINGS & RESEARCH

Long Term Credit Ratings
AAA – Highest Level of Safety
AA+, AA, AA-
A+,A,A-
BBB+,BBB,BBB-
BB+,BB,BB-
B+,B,B-
C+,C,C-
D

short Term Credit Ratings

Commercial paper, short-term debentures, certificates of deposit, inter-corporate deposits, working capital borrowings, with an original maturity of one year or less

A1+,A1 – Highest Level of Safety
A2+, A2
A3+,A3
A4+,A4
D - Default

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