Rating means assessment of the borrower’s credit standing by an independent expert agency. Credit rating reflects the issuer’s ability and willingness to service and repay debts fully and on time. A credit rating is not formally obligatory for bond issue, but it is necessary from the economic point of view, since investors make decisions on the basis of public information. A credit rating boosts the number of potential investors, cuts the cost of borrowing, extends the loan period and increases its amount.
Advice on how to get the rating required to issue bonds is provided by Triple A Rating Advisors Beratung Ges.m.b.H, which is registered in Àustria and part of the HVB Group, one of the UniCredit Bank’s shareholders.
Triple A assists clients in:
- speeding up the process of getting a rating
- getting the best possible rating
- simplifying information contacts between the client and the rating agency
In addition, the client receives a handbook on credit standing criteria which helps improve information management systems within the company.
The process of obtaining a rating involves:
1. Determining the main criteria for rating
by:
- evaluating the quantitative and qualitative factors that influence a company’s credit standing
- identifying the company’s strengths and weaknesses
- making comparison with similar companies
2. Developing a strategy for obtaining the best possible rating by:
- analyzing business strategy and the business plan and, if necessary, making the required improvements
- analyzing the liabilities, liquidity, and financial risk, and making, where necessary, the appropriate correctives
3.Assisting in the selection of a rating agency:
- making a comparative analysis of rating agencies
- evaluating the degree of proximity of the different rating agencies to individual countries and industries
- assessing the analytical team engaged
- supporting the client at price negotiations
4.Assisting in the drafting of documents by:
- helping to draft documents for the rating agency
- helping to arrange the company’s presentation for the rating agency
- establishing confidential relations between the company and the rating agency
- providing, if necessary, the assistance of third parties, accountants, lawyers or tax experts
5. Providing management support when meeting the rating agency by:
- giving instructions to the management before making the presentation to the rating agency
- rehearsing a meeting with the rating agency (considering the most probable questions)
- providing, if necessary, an advisor at the meeting with the agency
- discussing critical issues
6. Drafting the timetable and arranging for meetings by:
- maintaining permanent contact with the rating agency
- arranging for and coordinating meetings between the analytical team and the company’s representatives
- dealing with PR issues after obtaining the rating