VietnamCredit has created and unified the credit rating system with letters as the main symbol in order to provide a standardized system for the evaluation and comparison of relative credit rating for subjected companies on the following basic principles:
Ratings are clear, easy to understand and ensure comparability among credit ratings;
Ratings are put in order from lowest to highest in terms of the possibility of default and timely meeting debt obligations.
VietnamCredit's credit rating scale shows and reflects the objective and independent assessment of VietnamCredit on the ability to fully and timely perform debt obligations of subjected company. The credit rating scale describes probability of default from the lowest (being able to perform financial obligations) to the highest (default).
In our company reports, we provide clear, simple and easy-to-understand definitions of each rating on the credit rating scale and consistently apply those ratings to all types of companies.
VietnamCredit uses letter symbols to make relative credit risk assessments. In particular, the symbol ‘A’ denotes the best solvency while the symbols ‘C’, ‘D’ or ‘E’ denote the weakest solvency, or it can be interpreted as a default.
The above rating symbols are presented in an obvious, straightforward and easy-to-understand manner, in order to reflect the assessment of VietnamCredit on the ability to fully and timely perform the debt obligations of the subjected company.
On the rating scale, a debt instrument rated with the symbol ‘A’ will have a higher credit rating than a debt instrument rated ‘B’. However, in many cases, with assumptions and opinions to consider and give opinions on credit rating judgments, it can be very different because of the complexity of the problem. The complexity is due to the diversity of risk factors and moreover, each of which will have very different effects on the analysis of the assessment.
In addition, complexity is also shown by the impact of new and unforeseen risk factors (uncertainty factors) which might have huge impacts on the credit risk of the rated company.
During our operation, VietnamCredit always reviews and assesses the credit rating methods and assumptions used to make appropriate adjustments. We also focus on training and improving professional qualifications for our analysts and credit rating council members to ensure the quality requirements in credit rating operations
Related Article: Credit Rating Check With National Credit Information Center
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