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Benefits for corporate bond issuers of having a credit rating

Obtaining an independent and objective credit risk assessment in the form of a credit rating brings numerous significant benefits to issuers of corporate bonds:

  • by submitting to an assignment of an independent credit rating, issuers of bonds build an image of a transparent, credible and reliable company, therefore they can be positively distinguished on the capital market and more easily place their bond issues;

  • an external professional credit risk assessment allows expanding the group of potential buyers of issued debt securities to entities, which are not able to conduct credit risk analyses in their own scope and only purchase securities of companies with a credit rating assigned by an independent credit rating agency; in effect, this may be helpful for the company in placing the issue on the market and to lower costs of financing;

  • a detailed credit risk analysis (using the 20-grade scale) allows investors, who are interested in purchasing the issued debt securities, to estimate the required risk premium, which positively affects the demand for the company's debt securities, thus contributing to a decrease of the final costs of financing;

  • a credit rating allows investors to make quick and effective decisions without incurring excessive expenditures for analysing and monitoring the issuer's credit risk; this, in turn, increases their interest in debt securities offered by companies with an assigned credit rating;

  • investors obtain an access to rating reports, which describe in detail the situation of the company in the context of its financial credibility;

  • periodic rating verifications carried out by EuroRating as well as continuous monitoring of the credit risk of the analysed entity increase the safety of investing in the issuer's bonds on the secondary market, which contributes to an increased demand and higher liquidity of bonds trading;

  • credit ratings assigned by EuroRating are cost-effective even for enterprises performing minor bonds issues; the rating costs may be recovered in multiple in the form of a lower risk premium on bonds, which may be required by investors who purchase bonds in connection with the larger transparency of the issuer and continuous monitoring of its credit risk by an independent credit rating agency.