What is a credit rating
Credit ratings issued by EuroRating constitute synthetic credit risk assessments concerning individually analysed entities. The rating defines the financial credibility and the ability of the rated entity to pay short- and long-term financial liabilities within a time horizon of the subsequent 3 years.
Ratings assigned by EuroRating define the credit risk in terms of absolute categories – the level of ratings for individual entities does not depend on ratings of other entities. Therefore, ratings issued by EuroRating are not comparative rankings but are assessments assigned to the constant risk scale.
The credit risk expressed through ratings issued by EuroRating is defined based on a 20-grade scale, which is analogical to the traditional rating scale generally applied by international rating agencies. This ensures comparability of ratings and allows users to use ratings granted by several different agencies.
A current credit rating is valid for an unlimited period – until changed (or withdrawn) by EuroRating. Thanks to continuous monitoring of risk of rated entities and frequent periodical verifications of ratings, credit ratings issued by EuroRating are always up to date and reflect the current level of credit risk of the rated entities.