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
Request Rating
Client submits a request to initiate the rating engagement.
Signing a Rating Agreement
Scope, fees, confidentiality, and timeline are agreed and the contract is executed.
Formation of the Rating Team
Analysts and a committee secretary are assigned based on sector expertise.
Information Document Procurement
Initial information package and data are requested and collected from the issuer.
System Login – Analysis
Engagement is registered, data is uploaded to systems, and preliminary analysis begins.
Creating a Draft Report
Analysts prepare a draft rating report with methodology application and rationale.
Meeting with Rated Organization
Findings are discussed; management provides clarifications and additional evidence.
Rating Committee
Analysis is presented to the committee for deliberation and rating decision.
Notification of the Report
Outcome is communicated and the draft report is shared with the issuer.
Objection and Submission
Issuer may submit objections and supporting documents within the allowed timeframe.
Statement of Agreement
Objections are assessed; agreements are recorded and any dissent is documented.
Publication of the Report
Final rating report and related announcements are published.
Monitoring
Continuous surveillance and periodic reviews to keep the rating up to date.
Rating Scale and Definitions
The table below presents our rating classes with national and international long/short-term mappings and repayment capacity descriptions.
| Stand Alone Grade | Sponsor Support Grade | National | International | Repayment Capacity | |||
|---|---|---|---|---|---|---|---|
| Long Term | Short Term | Long Term | Short Term | ||||
| Investment Grade | A | 1 | AAA (Trk) | A-1+ (Trk) | AAA | A-1+ | Highest: Has the highest capacity to meet its current obligations. |
| AA+ (Trk) | AA+ | Very high: Has very high capacity to meet current obligations. | |||||
| AA (Trk) | AA | ||||||
| AA- (Trk) | AA- | ||||||
| A+ (Trk) | A-1 (Trk) | A+ | A-1 | High: Has high capacity to fulfill current obligations. | |||
| AB | A (Trk) | A | |||||
| B | A- (Trk) | A- | |||||
| 2 | BBB+ (Trk) | A-2 (Trk) | BBB+ | A-2 | Adequate: Adequate capacity to meet current financial obligations. However, this capacity is more likely to decline in future periods compared to other higher ratings. | ||
| BBB (Trk) | A-3 (Trk) | BBB | A-3 | ||||
| BBB- (Trk) | BBB- | ||||||
| Speculative Level | BC | 3 | BB+ (Trk) | B (Trk) | BB+ | B | Depends on economic conditions: Although there is no problem with the ability to meet current financial obligations, its continuity may not be possible in the future. |
| C | BB (Trk) | BB | |||||
| BB- (Trk) | BB- | ||||||
| 4 | B+ (Trk) | C (Trk) | B+ | C | Low level: The level of capacity to meet current obligations is low and there are concerns about the future. | ||
| CD | B (Trk) | B | |||||
| Default Level | D | 5 | B- (Trk) | B- | |||
| CCC (Trk) | CCC | The possibility of default: Uncertainty and the possibility of default in the fulfillment of financial obligations. | |||||
| CC (Trk) | CC | High default risk | |||||
| C (Trk) | C | Very high default risk | |||||
| E | DDD (Trk) | D (Trk) | DDD | D | State of default | ||
| DD (Trk) | DD | ||||||
| D (Trk) | D | ||||||
Rating Notation Comparison with Other Agencies
A side-by-side view of common rating notations used by major agencies.
| Rank | A.M. Best | Standard & Poor's | Moody's | Fitch | WR-World Rating |
|---|---|---|---|---|---|
| 1 | A++ = Superior | AAA = Extremely Strong | Aaa = Exceptional | AAA = Exceptionally Strong | AAA = Highest |
| 2 | A+ = Superior | AA+ = Very Strong | Aa1 = Excellent | AA+ = Very Strong | AA+ = Very High |
| 3 | A = Excellent | AA = Very Strong | Aa2 = Excellent | AA = Very Strong | AA = Very High |
| 4 | A− = Excellent | AA− = Very Strong | Aa3 = Excellent | AA− = Very Strong | AA− = Very High |
| 5 | B++ = Good | A+ = Strong | A1 = Good | A+ = Strong | A+ = High |
| 6 | B+ = Good | A = Strong | A2 = Good | A = Strong | A = High |
| 7 | B = Fair | A− = Strong | A3 = Good | A− = Strong | A− = High |
| 8 | B− = Fair | BBB+ = Good | Baa1 = Adequate | BBB+ = Good | BBB+ = Adequate |
| 9 | C++ = Marginal | BBB = Good | Baa2 = Adequate | BBB = Good | BBB = Adequate |
| 10 | C+ = Marginal | BBB− = Good | Baa3 = Adequate | BBB− = Good | BBB− = Adequate |
| 11 | C = Weak | BB+ = Marginal | Ba1 = Questionable | BB+ = Moderately Weak | BB+ = Depends on economic conditions |
| 12 | C− = Weak | BB = Marginal | Ba2 = Questionable | BB = Moderately Weak | BB = Depends on economic conditions |
| 13 | D = Poor | BB− = Marginal | Ba3 = Questionable | BB− = Moderately Weak | BB− = Depends on economic conditions |
| 14 | E = Supervision | B+ = Weak | B1 = Poor | B+ = Weak | B+ = Low level |
| 15 | F = In Liquidation | B = Weak | B2 = Poor | B = Weak | B = Low level |
| 16 | S = Suspended | B− = Weak | B3 = Poor | B− = Weak | B− = Low level |
| 17 | CCC = Very Weak | CCC = Very Weak | Caa1 = Very Poor | CCC = Very Weak | CCC = Possibility of Default |
| 18 | CC = Very Weak | CC = Very Weak | Caa2 = Very Poor | CC = Very Weak | CC = High Default Risk |
| 19 | C = Extremely Weak | C = Extremely Weak | Caa3 = Very Poor | C = Distressed | CCC−/CC = Very high default risk |
| 20 | R = Supervision | C = Lowest | C = Lowest | C = Distressed | DDD = In Default |
| 21 | DD/D = In Default |