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ARCHIVE | Criteria | Corporates | Industrials: Is Size Reflected in European Credit Ratings? Aug 01
Standard & Poors, Aug 2001
Abstract
(Editor's note: This article draws on material originally published on RatingsDirect on March 28, 2000, under the title 'Australasian Corporate Ratings: Does Size Matter?'. It has been updated to reflect European experience and to answer repeated inquiries about the relevance of size on an issuer's credit ratings.) Investors, and company management teams, often assume that absolute size--measured in revenue, assets, cash flow, number of employees, or market capitalization--is used as a discrete rating factor when assessing credit risk. This is not the case. There is no minimum size criterion for any given rating level, as size alone does not constrain a company's rating. Smaller entities are only considered to be at a greater risk when their size exacerbates any weaknesses...
Standard and Poors RatingsXpress Credit Research provides in-depth coverage of international corporates, financial institutions, insurance companies, utilities, sovereigns and structured finance programs. RatingsXpress Credit Research lets users determine the credit rating of holdings and identify key factors underlying an issuer's creditworthiness, distinguishes the different risk exposures for new and existing deals, and provides an understanding of how their analysts interpret key regulatory, political and environmental events and their economic impact.
Research Type: Commentary
Criteria articles describe the thought process and methodology Standard & Poor's analysts use in determining ratings. These commentary pieces discuss both the quantitative (economic and financial) and qualitative (business analysis and caliber of management) aspects of the analysis, as well as legal issues.
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