Financial Management

CHAPTER 10

 

1. The assessment symbols group similar (but not necessarily identical) entities in terms of their relative capacity of timely servicing of debts/obligations as per terms of contract, i.e., the relative degree of safety/risk. The suffix of + or − may be used with the assessment symbol to indicate the comparative position of the borrower within the group covered by the symbol. Thus LAA+, MAA+ and A1+ lie one notch above LAA, MAA and A1, respectively. The letter P in parenthesis after the rating symbol indicates that the debt instrument is being issued to raise resources by a new company for financing a new project and the rating assumes successful completion of the project. The rating symbols for different instruments of the same ...