Universal Rating Coverage Matters to Borrowers as well as Investors
To affect prices in fixed-income markets, rating opinions must be counted on as reliable. To be a global standard, ratings must also be pervasive and universally comparable.
Surveying the credit landscape, investors should feel confident that a Aaa is always a Aaa indicating the same relative level of creditworthiness across all Aaa-rated securities. That comparability should apply across each rating category from Aaa down to C, regardless of the type of security rated, the market in which it was issued, the issuer's domicile, or the currency of denomination.
Moody's rating process is geared to achieve that global consistency in several ways. Our rating committee process features a transnational, multidisciplinary approach that encourages the cross-fertilization of diverse opinions across the rated universe. And our country ceiling ratings provide the framework for rating consistency between borrowers in over 100 nations.
To provide value, an agency's ratings should also meet the market's needs for rating coverage across a "critical mass" of securities in each key sector of the capital markets globally. That is why our market representatives maintain regular contact with the major capital providers, in order to understand which sectors are of greatest interest to them. To meet the market's coverage needs, we hire analysts with experience in the relevant regions, industries, and financial technologies. We maintain a physical presence in the world's business and financial centers. We are committed to extending rating coverage in new and traditional sectors and we will extend rating coverage to benefit market participants whether or not the ratings are requested by issuers.
~The Rating Committee is a team of credit risk professionals who bring diverse knowledge and experience to all of the analytical perspectives relevant to each issuer. This team reviews credit risk factors against a range of scenarios, reaching consensus on what the final rating should be.~
