GRANDING METHODOLOGY


GRANDING METHODOLOGY

While the Credit Rating essentially refers to relative ranking of debt instruments and/or borrowing programmes of business entities based on probability of default, the term Grading indicates ranking of an entity in terms of performance (both operational & financial), infrastructure, business potential, contribution to the society and so on. It is, though perceived to be used synonymously with rating, but essentially it is a relative assessment of the fundamentals of the entity on a point wise scale (1-5 or 1-8) as opposed to the generic credit rating scale (AAA-D).

Grading Methodologies, scale and definition:

GRANDING MATHODOLOGY