Credit Statistical Model
ABOUT THE RATING MODEL
The model uses Statistic Sample comprising of data collected for a 3 years period
The data encompasses information of companies belonging to different industries, sectors and backgrounds
The model uses the logistic regression method to arrive at the variables with the highest predictable power
These Variables include Liquidity, Activity, Profitability and Capital Structure ratios.
ABOUT THE QUALITATIVE ASSESSMENT
The qualitative assessment is based on the below variables:
Derogatory Information: includes data obtained from courts, credit reports, banks and other agencies
Commercial Information: includes information from the client to evaluate Business Risk, Financial Risk and Management Risk. Macroeconomic Information: includes data obtained from expert sources in industry, government, academia, news reports, and financial journals to evaluate industry risk.
ABOUT THE RATINGS RESULT
The model and qualitative assessment gives the following outcomes:
- Rating Scale: The rating scale, running from a high of AA to a low of D, comprises 10 notches
- Outlook: indicates the potential direction of a rated entity’s rating over the medium term, typically one to two years. Maybe defined as Positive, Negative or Stable.
- Surveillance: indicates that a rating is under review for possible change in the short-term. The rating movement may be either positive or negative.