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1 2 3 4 5 6 7 8 9 10 11 12 13 14 INTRODUCTION

TOPICS

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MEANING AND CONCEPT OF CREDIT RATING A BRIEF HISTOY OF CREDIT RATING AGENCIES ADVANTAGES AND DIS ADVANTAGES OF CREDIT RATING FUNTION OF CREDIT RATING BENEFITS REGULATORY FRAMEWORK C.R.A. IN THE INTERNATION FINANCIAL SYSTEM C.R.A. PROCEDURES AND METHODS WHAT IS CORPORATE RATING? CREDIT AGENCIES IN INDIA SEBI GUIDENES CONCLUSION BIBLOGRAPHY

1. Credit rating agencies specialize in analyzing and evaluating the creditworthiness of corporate and sovereign issuers of debt securities. In new financial architecture , CRAs are expected to become more important in the management of both corporate and sovereign credit risk. This is an introduction to the work of credit rating agencies, which are key players in the financial markets and major employers of securities analysts. Credit rating agencies are key players in the financial markets, assessing the ability of corporate and governmental borrowers to incur and service debt, and the interest rate cost that they face. They are major employers and trainers of people in the field of securities research and securities analysis. Rating agencies are drawing increasing criticism for the quality of their work, which has led to frequent calls for reform of their practices. Some of these reforms have been mandated by regulatory bodies. 2. A credit rating agency (CRA) is a company that assigns credit ratings for issuers of certain types of debt obligations as well as the debt instruments themselves. In some cases, the servicers of the underlying debt are also given ratings. In most cases, the issuers of securities are companies, special purpose entities, state and local governments, non-profit organizations, or national governments issuing debt-like securities (i.e., bonds) that can be traded on a secondary market. A credit rating for an issuer takes into consideration the issuer's credit worthiness (i.e., its ability to pay back a loan), and affects the interest rate applied to the particular security being issued. The value of such security ratings has been widely questioned after the 2007-09 financial crisis. In 2003 the U.S. Securities and Exchange Commission submitted a report to Congress detailing plans to launch an investigation into the anti-competitive practices of credit rating agencies and issues including conflicts of interest.[1] More recently, ratings downgrades during the European sovereign debt crisis of 2010-11 have drawn criticism from the EU and individual countries. A company that issues credit scores for individual credit-worthiness is generally called a credit bureau (US) or consumer credit reporting agency (UK)

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3 Credit ratings provide individual and institutional investors with information that assists them in determining whether issuers of debt obligations and fixed-income securities will be able to meet their obligations with respect to those securities. Credit rating agencies provide investors with objective analyses and independent assessments of companies and countries that issue such securities. Globalization in the investment market, coupled with diversification in the types and quantities of securities issued, presents a challenge to institutional and individual investors who must analyze risks associated with both foreign and domestic investments. Historical information and discussion of three companies will facilitate a greater understanding of the function and evolution of credit rating agencies.

4. advantages (1) Safety of investments. (2) Recognition of risk and returns (3) Freedom of investment decisions. (4) Wider choice of investment (5) Dependable credibility of issuer (6) Easy understanding of investment proposal disadvantages (1) Non-disclosure of significant information (2) Static study. (3) Rating is no certificate of soundness. (4) Rating may be biased. (5) Rating under unfavorable conditions. (6) Difference in rating grades. 5.(1) provided information to investor (2) determination of public policy (3) reduction of expenses (4) business analysis (5) managerial valuation

6. Credit ratings are an important tool for borrowers to gain access to loans and debt. Good credit ratings allow borrowers to easily borrow money from financial institutions or public debt markets. At the consumer level, banks will usually base the terms of a loan as a function of your credit rating, so the better your credit rating, the better the terms of the loan typically are. If your credit rating is poor, the bank may even reject you for a loan.