Credit Ratings

A borrower’s credit rating is an opinion of the rating agency with respect to the creditworthiness of a business entity, city, region or country. Credit ratings are determined based on the past and current financial history of the above-mentioned market participants, as well as on the basis of evaluations of the size of their property and assumed financial obligations (debts). The main purpose of a borrower’s credit rating is to provide potential creditors / investors with an idea of the likelihood of timely payment of the financial commitments undertaken by the borrower.

Credit rating of a debt instrument is an opinion of the rating agency with respect to the creditworthiness of a debt obligation issuer (shares, bonds of business entities, local borrowing bonds, mortgage certificates, certificates of real estate funds, mortgage bonds, investment certificates) by a particular debt obligation. The main purpose of the credit rating of a debt instrument is provide potential investors with an idea of the ability and willingness of an issuer to service timely and in full a particular debt instrument.

Advisability of having a credit rating
Available credit rating of a borrower / a debt instrument, in addition to complying with the mandatory implementation of legislative norms, will allow a borrower / an issuer to provide the market with an independent benchmark of its financial solvency, without disclosing confidential information to the public, to expand the circle of investors, business partners, and to demonstrate the level of corporate culture, as well as to create and maintain the image of a reliable borrower.

Rating procedure
The credit rating of a borrower / a debt obligation is determined according to the ">Procedure of rating and the Methodology developed by IBI-Rating, by the National Rating Scale, which was approved by the Cabinet of Ministers of Ukraine’s Resolution N 665 on 26.04.2007. Analytical group, guided by the above-listed documents, conducts a full-scale research of qualitative and quantitative indicators of a borrower / an issuer, on the basis of findings of the research a Rating report is produced and the key factors affecting the grade of Credit rating of a borrower / a debt instrument are identified.

Rating product
A Rating report is the main document, which is submitted for consideration to the members of the Rating Committee (a collegial body) for decision-making on the determination of the credit rating of a borrower / a debt instrument. Subsequently, the Rating report, as well as the Rating Committee’s Decision are submitted to the borrower / issuer, who uses them both for regulatory purposes, and as a tool of communication with investors and business partners.

Rating follow-up / Rating surveillance
In order to ensure the relevance of the credit rating, IBI-Rating begins a procedure of monitoring of a borrower’s / issuer’s activities from the day following the rating determination, periodically updating the results of the previously assigned rating. A scheduled review of the rating takes place on a quarterly or semi-annual basis. Such a monitoring procedure allows users of the credit rating to stay informed on the financial condition of a borrower / issuer.

Information service / Information accompaniment
Throughout the entire period of monitoring of the Credit rating, IBI-Rating implements its information service / information accompaniment, which contributes to the creation and support of the business reputation of a borrower / issuer, and allows to communicate with the financial market.