Credit rating agencies provide assessments about the creditworthiness of bonds issued by corporations, governments by analysing financial positions of the issuer.
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- It gives information about debt payment capabilities of the issuer and related risk of default.
- Based on the assessment by CRAs, coupon rates are decided by the issuer.
- More is the risk; more is the coupon rate which is offered by the issuer.
- In India, CRAs are regulated by SEBI.
Major Credit rating agencies in India
1. CRISIL
2. ICRA
3. India Rating
4. CARE
Global Credit Rating Agencies
Their credit ratings are important for global investors who want to invest in securities of some other countries.
They conduct a sovereign credit rating which is a measurement of a government’s ability to repay its debt, with a low rating indicating high credit risk.
Major Global Credit Rating Agencies
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- S&P (Standard and Poor’s)
- Fitch
- Moody’s
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Does India deserve a sovereign credit rating upgrade? India’s arguments
Global Credit Agencies’ arguments
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