Credit Rating Organizations in Bangladesh
Before you decide whether to invest into a debt security from a company or foreign country, you must determine whether the prospective entity will be able to meet its obligations. A ratings company can help you do this. Providing independent objective assessments of the credit worthiness of companies and countries, a credit ratings company helps investors decide how risky it is to invest money in a certain country and/or security. A credit ratings agency is a company that assigns credit ratings to institutions that issue debt obligations (i.e. assets backed by receivables on loans, such as mortgage-backed securities. These institutions can be companies, cities, non-profit organizations, or national governments, and the securities they issue can be traded on a secondary market. Credit ratings are used by investors, issuers, investment banks, broker-dealers, and governments. For investors, credit rating agencies increase the range of investment alternatives and provide independent, easy-to-use measurements of relative credit risk; this generally increases the efficiency of the market, lowering costs for both borrowers and lenders. This in turn increases the total supply of risk capital in the economy, leading to stronger growth. It also opens the capital markets to categories of borrower who might otherwise be shut out altogether: small governments, startup companies, hospitals, and universities. There are 8 credit rating companies in Bangladesh. And they are:
Name Of Companies
No.of Comapnies Credit Rating Information and Services Ltd (CRISL
Credit Rating Agency of Bangladesh Ltd (CRAB)
National Credit Ratings Ltd
Emerging Credit Rating Ltd
ARGUS Credit Rating Services Ltd.
WASO Credit Rating Company (BD) Limited
Alpha Credit Rating Limited
The Bangladesh Rating Agency Limited
Credit Rating Information and Services Limited
Credit Rating Information and Services Limited is a company that started its journey to implement a Concept in Bangladesh – “Credit Rating”. The voyage of how CRISL conceptualized this idea in 1995 and implemented it in Bangladesh and finally achieved its operating license in 2002 – after almost eight years of struggle – has a long, interesting, exciting and also painful history. CRISL is now the national flagship company representing the profession at home and abroad. CEO: The CEO of this company is Muzaffer Ahmed, FCMA, and FCS
Credit Rating Services
CRISL offers various rating services. The rating services cover: •
Corporate/ entity rating for direct listing or for IPO at premium •
Bank/ financial institution rating
Insurance claim paying ability rating
Bank counter party rating
Bank loan exposure/ Facility rating
Rating of the structured products such as Zero Coupon Bonds. Mortgage backed or asset backed securities, debentures, preference share financings, subordinated debt products •
Project financing ratings
Micro Finance rating
MFI- social impact rating
Educational Institution Rating
Corporate Governance Rating
Step by Step process
Primary discussion with the Client interested for rating
Execute Rating Contract with the client stating the terms and conditions including Fees 3.
Assign the task to an Internal Rating Team (IRT)
IRT formally approach the client for primary information through a set Questionnaire with a given timeframe 5.
IRT collates and analyzes information collected from the client as well as from CRISL Database and identifies the gaps of further information from Market and Client 6.
IRT interacts with clients, visits site and analyzes data submitted by the Client 7.
IRT organizes interview with various professional group and simultaneously interact, exchange views with them and prepare Draft Report and forwards the same to the...
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