Qualitative Descriptions of Corporate Risk

CC1: Very Good Credit Quality
The risk of payment interruption is expected to be low or very low. The obligor has a very strong capacity for repayment and this capacity is not likely to be affected by foreseeable events. The obligor has a limited or very limited susceptibility to adverse effects of changes in circumstances and economic conditions.

The credit quality is typically manifested in a combination of some, if not all, of the following characteristics of the business and financial profile:

  • Very good to good cash and income generation
     
  • Very good to good liquidity levels
     
  • Very low to low leverage
     
  • Very strong business profile with proven management abilities
     
  • High quality of financial and ownership disclosure exists unless there is a very high likelihood of support from a parent (or sovereign) with a buyer risk classification equal or stronger than what corresponds to this buyer risk category.

CC2: Good to Moderately Good Credit Quality
The risk of payment interruption is expected to be low. The obligor has a good to moderately good capacity for repayment and this capacity is not likely to be affected by foreseeable events. The obligor has a limited susceptibility to adverse effects of changes in circumstances and economic conditions.

The credit quality is typically manifested in a combination of some, if not all, of the following characteristics of the business and financial profile:

  • Good to moderately good cash and income generation
     
  • Good to moderately good liquidity levels
     
  • Low to moderately low leverage
     
  • Moderately strong business profile with proven management abilities
     
  • High quality of financial and ownership disclosure exists unless there is a very high likelihood of support from a parent (or sovereign) with a buyer risk classification equal or stronger than what corresponds to this buyer risk category.

CC3: Moderate Credit Quality
The risk of payment interruption is expected to be moderate or moderately low. The obligor has a moderate or moderately good capacity for repayment. There is a possibility of credit risk developing as the obligor faces major ongoing uncertainties or exposure to adverse business, financial or economic conditions which could lead to inadequate capacity to meet timely payments. However, business or financial alternatives may be available to allow financial commitments to be met.

The credit quality is typically manifested in a combination of some, if not all, of the following characteristics of the business and financial profile:

  • Moderately good to moderate cash and income generation
     
  • Moderately good to moderate liquidity levels.
     
  • Moderately low to moderate leverage
     
  • Moderate business profile with proven management abilities
     
  • Adequate quality of financial and ownership disclosure exists unless there is a very high likelihood of support from a parent (or sovereign) with a buyer risk classification equal or stronger than what corresponds to this buyer risk category.

CC4: Moderately Weak Credit Quality
The risk of payment interruption is expected to be moderately high. The obligor has a moderate to moderately weak capacity for repayment. There is a possibility of credit risk developing as the obligor faces major ongoing uncertainties or exposure to adverse business, financial or economic conditions which could lead to inadequate capacity to meet timely payments. However, business or financial alternatives may be available to allow financial commitments to be met.

The credit quality is typically manifested in a combination of some, if not all, of the following characteristics of the business and financial profile:

  • Moderate to moderately weak cash and income generation
     
  • Moderate to moderately weak liquidity levels
     
  • Moderate to moderately high leverage
     
  • Moderately weak business profile with limited track record of management abilities
     
  • Adequate quality of financial and ownership disclosure exists unless there is a very high likelihood of support from a parent (or sovereign) with a buyer risk classification equal or stronger than what corresponds to this buyer risk category.

CC5: Weak Credit Quality
The risk of payment interruption is expected to be high to very high. The obligor has a moderately weak to weak capacity for repayment. The obligor currently has the capacity to meet repayments but a limited margin of safety remains. However, there is a likelihood of developing payment problems as the capacity for continued payment is contingent upon a sustained, favorable business and economic environment. Adverse business, financial, or economic conditions will likely impair capacity or willingness to repay.

The credit quality is typically manifested in a combination of some, if not all, of the following characteristics of the business and financial profile:

  • Moderately weak to weak to very weak cash and income generation
     
  • Moderately weak to weak liquidity levels
     
  • Moderately high to high leverage
     
  • Weak business profile with limited or no track record of management abilities
     
  • Poor quality of financial and ownership disclosure exists unless there is a very high likelihood of support from a parent (or sovereign) with a buyer risk classification equal or stronger than what corresponds to this buyer risk category

 

     
 

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