Corporate Scorecard provides subscriber-based, client commissioned, and issuer-based ratings for a range of organisations across finance, insurance, government and corporate sectors. Our reports clearly identify the specific type of rating (ie. issuer-based), together with the assessment date, initiation (ie. solicited), scope (ie. specific commitment), surveillance (ie. ongoing monitoring), distribution restrictions (if any), sources of information, entity participation, fee arrangement, and rating qualifications (if necessary).
- Corporate Ratings
- Commitment Ratings
- Public Ratings
- Private Ratings (Shadow Ratings)
- Client Commissioned Ratings
- Issuer Based Ratings
- Subscriber Based Ratings
- Updated Ratings
- System Ratings
- Rating Engagement
Corporate Scorecard specialises in providing corporate credit ratings. A Corporate Rating provides an Agency's opinion on the financial capacity, viability, and willingness of a rated entity in meeting its ongoing financial commitments and obligations within the normal course of business. The credit rating is therefore a critical measure representing the overall risk profile of the rated entity, and reflects the expected level of distress and overall likelihood of default. The Corporate Rating is influenced by an entity's size, sector and structure (being either a private entity, listed corporation, financial institution, Government agency, or a large consortium). The financial risk profile is also considered within the context of economic, industry, management, ownership, market, governance, strategy, and operational considerations. This rating does not however consider the entity's capacity to fulfil a specific commitment, and the Commitment Rating (refer below) may be markedly different to the Corporate Rating.
Corporate Scorecard is routinely engaged to evaluate the credit quality and risk profile relating to a specific financial and/or contractual commitment. A Commitment Rating is assigned by the Ratings Committee after reviewing the specified obligation within the context of its Corporate Rating, which is credit enhanced or constrained based on commitment specifics. These considerations include (in addition to other risk based parameters) the commercial value, contractual duration or commitment tenure, cash-flow projections, payment priority, and projected recovery rates. A Commitment Rating provides a more accurate assessment of an entity's capacity to honour a specific financial obligation and/or to fulfil and complete a contractual commitment.
A public rating is available for release by an issuer or other rated entity through Corporate Scorecard’s official online ratings release mechanism. This regime provides appropriate oversight and governance for the distribution of ratings and reports. The online portal facilitates automatic notifications to report recipients of subsequent rating updates, and other supplementary information including economic and industry updates, changes to underlying assumptions, changes from methodological or model reviews, and ongoing ratings performance data.
Private Ratings (Shadow Ratings)
Credit ratings commissioned on a private and confidential basis are known as shadow or private ratings and are restricted in their disclosure and disemination. The private ratings and reports are provided for the exclusive and internal use of the fee paying entity, and may not be disclosed to any other person or entity without written consent from Corporate Scorecard. Corporate Scorecard applies strict controls and governance procedures to ensure the management of confidential information.
Client Commissioned Ratings (and Counterparty Risk Assessments)
A client commissioned rating is provided to principals that are seeking to evaluate the commercial and financial risk of an external counterparty, across investment, acquisitions, procurement, and contracting arrangements. These ratings provide an independent expert opinion on the counterparty credit risk and reflects the particular service needs of the client. The majority of Corporate Scorecard’s fees are generated from client commissioned credit ratings, and as such the company has limited the potential ‘conflict of interest’ faced by other rating agencies. While Corporate Scorecard also provides issuer-based ratings, these engagements adhere to strict governance protocols to ensure the quality, integrity and independence of the rating assessment process.
Issuer Based Ratings (and Private Self Assessments)
An issuer based rating is paid by and provided to organisations that are seeking to raise capital and/or to demonstrate their credit quality to respective stakeholders, financiers, insurers and other counterparties. These types of ratings were heavily criticised during the GFC, and regulatory authorities subsequently imposed additional governance and disclosure requirements and industry surveillance to address potential conflicts-of-interest. As such issuer based ratings and self-assessments are paid in advance on a non-refundable basis to avoid potential conflicts of interest. An issuer based credit rating provides many benefits, including lower financing costs, wider, stable and more flexible access to capital markets, and greater liquidity. Issuers can then provide the market with an independent expert opinion of their credit quality and risk profile. A private self assessment enables a rated entity to obtain a rating for internal purposes only.
Subscriber Based Ratings (and Portfolio Management Capabilities)
Corporate Scorecard maintains a credit ratings database of entities that are publicly listed in Australia. The credit ratings provided under the subscriber based arrangement are private ratings, and are provided for the exclusive and internal use of the fee paying subscriber. These ratings are updated annually following the release of the entity's annual financial statements. Subscribers have access to portfolio management capabilities to analyse and report on user-defined portfolio's, and to monitor key trends and changes across sectors over time.
Updated Ratings (Ongoing Monitoring and Rating Surveillance)
Corporate Scorecard assigns ratings using information available at the time of an assessment. However some engagements include ongoing monitoring, and in these situations the nominated credits are subject to continued ratings surveillance. Many clients and rated entities require updated ratings to demonstrate and monitor the credit risk profile throughout the life of an entity's commitment or product. Corporate Scorecard uses the online ratings release mechanism to facilitate automatic notifications of subsequent ratings updates.
The Risk Assessment Platform (RAP) is used as a primary tool to derive a system ratings by Corporate Scorecard. The rating is derived from a quantitatively driven, scientifically based and empirically validated model on the basis of information available at the time of the assessment of an entity. The system rating is an initial assessment only, being qualified on the basis of limited analysis for credit rating purposes. It is provided as a guide to the likely credit quality of the debtor and is not the Official Credit Rating.
Each rating engagement is conducted as a separate commercial transaction, and our opinion is formulated in accordance with the particular context and circumstances of the engagement. As such, Corporate Scorecard maintains a clear and transparent model for the derivation, disclosure and distribution of its ratings, and for the remuneration of our services.