CREDIT RATING SERVICES
Financial rating is an evaluation of the financial solvency of a company, state, or financial instrument. It is conducted by rating agencies that assign a grade to the entity based on its ability to repay debts and financial stability. Financial ratings are typically expressed in letters or symbols such as AAA, AA+, A-, B, etc. The highest ratings are considered the strongest and safest, while lower ratings indicate a higher risk of default or bankruptcy.
Bank rating's mission is a financial assessment aiming to evaluate the financial strength of a bank, including its overall and intrinsic ability to meet financial commitments. This rating assesses the robustness and resilience of the institution. Applicable to all types of banks (retail banks, corporate banks, development banks, etc.), bank ratings provide an essential tool for communication and valuation within the entire economic and financial environment of the bank, including shareholders, clients, and funders.
Due to the economic model reliance of leasing institutions on debt and the sourcing of external resources, financial rating holds crucial importance for market confidence in the issuer and hence for the continuity of its operations under optimal conditions. Rating notably enables rigorous monitoring of the sustainability of financial commitments and alerts regarding risks associated with the cost of the financing mix, as well as its inadequacy concerning the parameters for deploying its financial products in the market.
The mission behind assessing the financial quality of insurance companies and reinsurance establishments aims to evaluate and support the technical and financial fundamentals of their governance. This is accomplished notably by assessing the two pillars of their activities: firstly, the management of the technical intermediation activity and economic risks, and secondly, the management of investments and liquidity. Additionally, rating the financial quality of insurance and reinsurance companies contributes to reinforcing the principle of trust, crucial for the success of their operations, both between insurers and reinsurers and with all stakeholders. It highlights the solidity and fundamentals of the rated entity, along with its capabilities and predispositions to protect and manage risks for its partners.
Microfinance presents itself as an effective instrument to promote financial inclusion, yet its effectiveness requires consolidation both in terms of financial capabilities and managerial aspects. Faced with specific risks and coverage, the mission of rating microfinance institutions aims to provide comprehensive diagnostics to these institutions within the sector, evaluating all parameters concerning their financial strength and performance. This notably enhances their risk assessment and measurement mechanisms, dynamic loan management processes, as well as their cash management procedures and financing needs. Once established, the rating aims to consolidate and showcase the financial quality of the microfinance institution while enhancing its appeal for equity and debt mobilization, as well as for establishing financial and non-financial partnerships.
In numerous countries, local governance entities such as municipalities, regions, governorates, or provinces are increasingly expected to play a significant role in economic development based on their scope and legal prerogatives. Within this framework, local governance entities express a set of needs in terms of financial resources and technical solutions that enable them to fulfill their roles and objectives. The missions involved in rating local governance facilitate a comprehensive diagnostic of the entity's financial management. This is achieved through an evaluation and rating scheme specific to the roles and constraints of this type of structure. The diagnostic revolves around a thorough analysis of governance and organizational procedures and instruments, budgetary flexibility and performance, cash position and access to financing, resilience to risks, debt, and financial solvency. Furthermore, rating provides local governance structures with a communication and valuation tool that reflects the viability and quality of their financial situations.
PBR Rating's corporate rating missions are deployed for industrial and service sector companies, whether public or private. Corporate rating allows the issuer to send a strong signal to the markets, as well as to its funders and partners, about the quality of its financial situation, especially when the rating occurs during a funding solicitation phase—a critical phase throughout the company's development cycle. The purpose of rating is to reassure external stakeholders and promote financing conditions. It also aims to bolster shareholders and management regarding the entity's strategic choices, its market positioning, cash position, resilience to risks, adequacy of its financing mix, and actual debt capacity. This is achieved through the rating report provided and presented to the company, based on the individual analysis and rating scheme designated for each sector of activity.
The mission of Asset Management Quality Rating (AMQR) is a financial and organizational evaluation aimed at assessing the quality of managing financial assets held or to be held by a specialized entity in this field. This mission enables the recipient to obtain a diagnosis and improvement insights into their investment activities and value creation. Additionally, it provides a financial quality rating that enhances the recognition of their technical and managerial capabilities in the investment and asset management realm, considering their entire economic and financial environment.
Financial management and the very concept of economic quality and solvency rely on quantitative criteria of financial origin, as well as on other increasingly important aspects in the minds of managers and in how the company is perceived by its environment. Therefore, non-financial ratings have emerged as evaluation, monitoring, and valuation instruments for non-financial parameters, which hold strategic significance for companies. These ratings highlight the incorporation of new challenges and issues faced by companies, typically presented by the market. In this context, PBR Rating's ESG (Environmental, Social, Governance) Rating implements a comprehensive rating scheme to measure and disclose the impacts of companies concerning ESG matters. It serves as a strategic tool to strengthen corporate governance and establish competitive advantages in operational efficiency, marketing leverage, and attractiveness for financing.