EthiFinance Ratings is reviewing its methodologies for Corporate Ratings, Short-Term Ratings and Instrument Ratings

01th July of 2022

EthiFinance Ratings is launching a request for comments for its Corporate Ratings, Short Term Ratings and Instrument Ratings (previously called Bond Ratings) methodologies, and is inviting companies, investors and other stakeholders to submit their comments and suggestions.

The Request for Comments period is starting on 1 st of July and is expected to last until mid-August. Unless specified otherwise, these comments will be considered as public. During that period, we will also reach out to rated issuers to explain the new methodologies and obtain feedback. Comments should be submitted at the following email address: rfc@ethifinance.com. The final version is expected to be published and implemented in Q4 2022.

This proposed corporate methodology incorporates changes in the analytical factors and their respective weights. We introduce an approach to non-financial (ESG) risk factors and their impact on the credit quality of a rated entity. Also, we present further refinements and clarifications in order to provide additional transparency and clarity regarding our methodology. Finally, a reviewed liquidity analysis process led to adjustments in the short-term rating methodology.

We anticipate that the vast majority of credit ratings will remain unchanged and for those ratings that could be impacted, the change would be limited to one notch, evenly distributed between positive and negative. Estimates have been realised with a standard economic scenario that is not considering a recession in the coming 24 months. A more conservative scenario would likely lead to an even more neutral effect on current ratings.

To access the Corporate Rating methodology, please click here.

To access the Corporate ShortTerm Rating methodology, please click here.

To access the Instrument Ratings (previously called Bond Ratings) methodology, please click here.