Credit Rating Agency Final

8/3/2019 Credit Rating Agency Final

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Akshay Hedau...03 Bhaves Lakhotiya..11

Haresh Savaliya.13

Manoj Pal...20

Vikash Singh..22

Akshay Patil..75

Viraj Parab.76

Sushant Hankare ..70

Rohan Parab..62

Jay Naik..33

Prof. Sujata Pandy


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It assesses credit worthiness of an individual,corporation, or a country

Calculated from financial history and currentassets and liabilities

It tell the investor the probability of the subjectbeing able to pay back the loan


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The first credit rating agency wassetup in new york In 1981

Later it was taken over by RobertDun, agency publish its first ratingguide in 1859

The second credit rating agency

was establish by john bradstreet in1949


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Fitch rating(UK/US) John Knowles Fitch in 1913. (1924 AAA to D rating system)

Moody investors service (US)- John moodyand company in 1900

Standard & Poors(US)-Henry Varnum Poor in 1941


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CRISIL (Credit rating and information services ofindia ltd)1987

ICRA ltd(Investment information and credit ratingagency of India ltd)1991

CARE(credit analysis and research ltd)1994

Duff and phelps credit rating India ltd 1996


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Standard and poors rating services traces its history back to 1860,the year that HENRY VARNUM POOR published the history ofrailroads and canals of the united states.

POOR was concerned about the lack of quality informationavailable to investors and embarked on a campaign to publicizethe details of corporate operations.

Standard and poor has been publishing credit ratings since 1916,

providing investors and market participants worldwide withindependent analysis of credit risk.


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It is the first rating agency in India

It was promoted in 1987 by the Industrial Credit and

Investment Corporation of India Limited (ICICI) and

Unit Trust of India (UTI).

The head office of the company is located at Mumbai

and it has established offices outside India also.


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Acts as a marketing tool. Useful input in the decisions relating to lending and

investments.

Helps in establishing business relationships with

Business Counter-parties. Rating safeguards against bankruptcy through

recognition of risk.

Helps merchant bankers, brokers, regulatoryauthorities etc. to determine eligibility criteria.

Increases transparency of the financial system


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By Investors

By a Company

By Businesses & Financial

Institutions

By Intermediaries


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1.Safeguards against bankruptcy

2. Recognition of risk

3.Credibility of the issuer

4. Independence of investment and quickinvestment decision

5.Low cost of borrowing

6.Merchant bankers job made easy 7. Foreign collaborations made easy

8.Saves time, money, energy, and manpower inconvincingtheir clients about investments.


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9.Less effort in studying companys credit

position to convincetheir clients.

10. Easy to select profitable investmentsecurity

11. Helps to improve business


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Past credit

Liens of credit

Bill paying

Current debt

Credit Applications


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Credit ratings are only opinion about the relative creditrisk.

Credit ratings are not investment advice to buy or holdsecurities , they are just one factor investor mightconsider while making investment decision

Credit ratings are not guarantee of credit quality of a nindividual, it basically calculates probability of

payment.


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Impact on Indian Economy

Impact on Indian Stock Market

Impact on Gold prices

GENERAL IMPACTS

(On Countries who have been downgraded)

Impact on FDI & FII Impact on Borrowing Cost


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Make loan payments on time and for the correctamount.

Avoid overextending your credit. Unsolicited credit

cards that arrive by mail may be tempting to use, butthey won't help your credit score.

Never ignore overdue bills. If you encounter anyproblems repaying your debt, call your creditor to

make repayment arrangements. If you tell them you arehaving difficulty, they may be flexible.

Be aware of what type of credit you have. Credit fromfinancing companies can negatively affect your score.


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Keep your outstanding debt as low as you can.Continually extending your credit close to your limit isviewed poorly.

Limit your number of credit applications. When yourcredit report is looked at, or "hit," it is viewed as a badthing. Not all hits are viewed negatively (such as thosefor monitoring of accounts, or prescreens), but mostare.

Credit is not built overnight. It's better to provide

creditors with a longer historical time frame to review:a longer history of good credit is favored over a shorterperiod of good history.

Credit Rating Agency Final

Documents

Transcript of Credit Rating Agency Final