Rating Methodology
Our comprehensive approach to evaluating creditworthiness across different sectors and entities.
Our Methodology Framework
World Rating employs a robust, transparent, and consistent methodology framework designed to assess creditworthiness across various entities including sovereign states, financial institutions, corporations, and structured finance products.
Our methodologies are regularly reviewed and updated to reflect evolving market conditions, regulatory changes, and emerging risks.
Sovereign Rating Methodology
Our sovereign rating methodology evaluates a country's ability and willingness to service its debt obligations. The analysis encompasses:
Economic Structure and Growth Prospects
GDP per capita, growth trends, economic diversity, and competitiveness.
Fiscal Strength
Debt burden, fiscal balance, revenue generation capacity, and expenditure flexibility.
External Position
Current account balance, external debt, reserve adequacy, and currency stability.
Institutional Strength and Governance
Rule of law, policy effectiveness, transparency, and political stability.
Corporate Rating Methodology
Our corporate rating methodology assesses a company's ability to meet its financial obligations. Key factors include:
Business Risk Profile
Industry characteristics, competitive position, and operational efficiency.
Financial Risk Profile
Cash flow adequacy, capital structure, financial flexibility, and liquidity.
Management and Governance
Strategic planning, risk management practices, and corporate governance standards.
Country Risk
Impact of sovereign risk, regulatory environment, and macroeconomic conditions.
Rating Process
Data Collection & Analysis
Gathering comprehensive data from public sources and direct submissions, followed by rigorous quantitative and qualitative analysis.
Rating Committee
A diverse committee of experts reviews the analysis, debates key issues, and determines the final rating through a voting process.
Publication & Monitoring
Ratings are published with detailed rationales, followed by continuous monitoring and periodic reviews to ensure relevance.
Rating Scale and Definitions
World Rating uses a standardized rating scale that provides a clear indication of relative credit risk. Our ratings range from AAA (highest quality) to D (default).
| Rating | Definition |
|---|---|
| AAA | Extremely strong capacity to meet financial commitments. Highest rating. |
| AA | Very strong capacity to meet financial commitments. |
| A | Strong capacity to meet financial commitments, but somewhat susceptible to adverse economic conditions. |
| BBB | Adequate capacity to meet financial commitments, but more susceptible to adverse economic conditions. |
| BB | Less vulnerable in the near term, but faces ongoing uncertainties. |
| B | More vulnerable to adverse business, financial, or economic conditions. |
| CCC | Currently vulnerable and dependent on favorable conditions to meet financial commitments. |
| D | In default or breach of an imputed promise. |