Credit Rating Agency
Credit rating agency is the rating service company which is destined to assign ratings. There are different kinds of rating included in this regard. These can be expressed as follows.
Ratings done by credit rating agency
There are different kinds of ratings done in the credit rating agency. Among these the most prominent one include the rating of the ability of a debtor to pay back the debt and in this way the interest payments are made timely without including the option of any default in paying off the loans along with interests. In addition to this the credit rating agencies are responsible for rating the debt obligations of the issuers of debt. In addition to this, the underlying debt is also rated and considered.
Scope of credit rating agencies
The debt rating agencies are supposed to rate the debt investments which include the government and corporate bonds, stock of preferred value, municipal bonds, CDs, securities of collateralized goods and articles and all the mortgage backed and supported securities. In this way one can come to know that the scope of the credit rating agencies is very vast and these agencies can issue a lot of securities and obligations. There are many other special purpose goods and entities which are encompassed by the credit rating agencies.
Companies issuing the securities on debts and loans
There are many companies, non profit organizations and authorities which issue and express their securities and obligations on the interests and debts. These may be government bodies or the non government organizations. In addition to this, many other companies and organizations like local governments and other severing bodies can also express their reservations and in response to their reservations, the credit rating agencies then verify the doubts and come with the facts accordingly. The biggest advantage of the credit rating is that it can permit the trading in secondary markets.
When the credit rating agencies carry out the rating procedure, it can directly affect the rate of interest of people which was set once at the time of giving away debts to the debtors. Therefore they work in different aspects.
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Most WantedFinancial Terms
- Most Important Financial Ratios
- Debt-to-Equity Ratio
- Current Ratio
- Interest Coverage Ratio (ICR)
- Financial Leverage
- Break-even Point