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Legal Position

Terms of the issue document/prospectus, trustees and their responsibilities, for timely payment and for protection against fraud/forgery and so on. While the CRAs do not have a minimum size niter ion for any given rating level, the size of the ny is a critical factor in the rating decision as smaller companies are more vulnerable to cycle swings as compared to larger companies. In general, small companies are more concentrated in terms of product, number of customers and geography and, consequently, lack the benefits of diversification that can benefit larger firms.

If the company being rated is a subsidiary or affiliate, that is controlled by/has strong links with a dominant parent company, then the rating also includes an analysis of the parent company's credit quality. The parent company's credit quality could have an impact on the issuer's own credit quality.

Posted by: andy

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