EthiFinance Ratings is reviewing its methodologies for Corporate Ratings, Short-Term Ratings and Instrument Ratings

The Request for Comment period launched on 1st July 2022 for EthiFinance Ratings’ three methodologies on Corporate Ratings, Short Term Ratings and Instrument Ratings (previously called Bond Ratings) has lapsed, with the consultation closing on 25 August. We are currently reviewing all comments received and expect to revert and publish the final version in Q4 2022.

We thank all contributors for their input in the process.

This proposed corporate methodology incorporates changes in the analytical factors and their respective weights. We introduce an approach to non-financial (ESG) risk factors and their impact on the credit quality of a rated entity. Also, we present further refinements and clarifications in order to provide additional transparency and clarity regarding our methodology. Finally, a reviewed liquidity analysis process led to adjustments in the short-term rating methodology.

We anticipate that the vast majority of credit ratings will remain unchanged and for those ratings that could be impacted, the change would be limited to one notch, evenly distributed between positive and negative. Estimates have been realised with a standard economic scenario that is not considering a recession in the coming 24 months. A more conservative scenario would likely lead to an even more neutral effect on current ratings.

The document corresponds to the RfC and is provided for information purposes.

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