2. A credit rating is an evaluation of the credit
worthiness of a debtor, especially a business
(company) or a government, but not individual
consumers. The evaluation is made by a credit
rating agency of the debtor's ability to pay back
the debt and the likelihood of default
3. Types of Credit Rating
โขInternational Ratings
โขNational Ratings
4. โข Benefits to Investors
โข Benefits of Rating to the Company
โข Benefits to Intermediaries
5. Disadvantages of credit rating
โขBiased rating and misrepresentations
โขStatic study
โขConcealment of material information
โขRating is no guarantee for soundness of
company
โขHuman bias
โขReflection of temporary adverse conditions
โขDifference in rating of two agencies