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EthiFinance Ratings is launching a request for comments for its new Government-Related Entities Methodology and is inviting market participants to submit their comments and suggestions.
This methodology establishes a comprehensive framework for assessing Government-Related Entities (GREs) across all asset classes rated by EthiFinance Ratings (EFR). It aims to capture the impact of the extraordinary support of a public sponsor on the creditworthiness of the GRE.
The Request for Comments period is starting on the 7th of October and is expected to last at least until the 7th of November. Unless specified otherwise, these comments will be considered as public. Comments should be submitted at the following email address: rfc@ethifinance.com. The final version is expected to be published and implemented during 1Q2027.
EthiFinance, the European group specializing in ESG, Credit, and Expertise, launched its new website "ethifinance.com" on October 5, 2026.
The new website brings together the former EthiFinance and ESG Book websites into a single online presence.
The redesigned website offers a clearer, more user-friendly experience and presents EthiFinance's full range of solutions across its three independent business lines: ESG, Credit, and Models.
Visitors can now explore the group's solutions by audience (corporates, investors and banks).
With a clean, modern design, the new website reflects EthiFinance's position as a European player in sustainable finance and credit ratings.
For questions, please use the contact form.
EthiFinance Ratings has developed and released its Debt Investment Fund (DIF) Rating Methodology, which details the process by which the agency assigns ratings to the debt issued either by a master fund (MF) holding the underlying loans, or by its corresponding feeder fund, which invests in the MF as a limited partner (LP).
In both cases, the rated debt is secured by the underlying loans held by the MF. The issuing vehicle may adopt different legal forms, such as a special purpose vehicle (SPV) or a designated activity company (DAC), among others.
The new methodology is available on EthiFinance Ratings’ website under the Methodologies section.
EthiFinance Ratings has just published a 'principles behind credit ratings' document that presents the main credit principles that support methodology development, and by extension credit ratings assigned by EthiFinance Ratings through the course of its business.
This document is not a methodology per se but can be used by the analysts to assign credit ratings in the absence of a dedicated methodology.
EthiFinance Ratings has amended its Credit Rating Disclosure Policy to allow public viewing of all unsolicited credit ratings. With this decision, EthiFinance Ratings aims to increase transparency and accessibility of our credit ratings for all sectors. The change will take effect today, Wednesday 12th of March.
EthiFinance Ratings is launching a request for comments for its new Corporate rating methodology - Real Estate Investment Companies & Real Estate Transactions and is inviting market participants to submit their comments and suggestions.
The Request for Comments period is starting on the 25th of November and is expected to last at least until the 26th of December. Unless specified otherwise, these comments will be considered as public. Comments should be submitted at the following email address: rfc@ethifinance.com. The final version is expected to be published and implemented in Q1 2025.
This methodology comprises two sections. The first one details how EthiFinance Ratings assesses companies whose main purpose is to own real estate assets and to derive revenues from the rental of these assets. The second part is a revision of the existing Corporate rating methodology - Commercial Real Estate (CRET) that EthiFinance Ratings wishes to merge within a single Real Estate Investment methodology. EthiFinance Ratings currently has no ratings covered by the CRET methodology, and will discontinue this methodology upon publication of the new framework.
EthiFinance Ratings, an independent European credit rating agency, upgrades the rating of the Republic of Portugal from BBB+ to A-, with an outlook change from Positive to Stable, driven by both methodological changes and improvements in the country’s fundamentals, including the swift return to fiscal surpluses following the pandemic, a positive macroeconomic environment, and a strong ESG assessment, underlining the capacity and commitment to meet financial obligations.
Specifically, EthiFinance Ratings projects growth rates of 1.8% for 2024 and 1.9% for 2025, though these figures remain below the potential growth rate of 2.2% estimated by the European Commission. In addition, the agency expects unemployment to remain stable, with projections of 6.5% for 2024 and 6.4% for 2025, according to the European Commission, as a result of an increase in the labor force, while employment rates continue to evolve positively, reaching a historic high of 75.3% in 2023.
The report also highlights the swift correction of public account imbalances following the pandemic, resulting in a fiscal surplus of 1.2% of GDP in 2023. This rapid adjustment was driven by a strong economic recovery, increased tax revenues, and the gradual phase-out of pandemic-related expenditures. While this surplus is expected to moderate, it is projected to remain positive in 2024 and 2025 (0.2% for both years, according to the IMF). In this context, fiscal prudence is contributing to a reduction in public debt levels, which reached 99.1% of GDP in 2023. However, public debt remains high, posing one of the primary constraints on the country’s rating.
Furthermore, wealth levels remain modest, with a GDP per capita around 60% of the Eurozone average, and according to the study, the country faces significant demographic challenges, with an aging population that could create increased fiscal pressures and impact growth potential. At the same time, the agency expects public investment to increase, supported by the ongoing implementation of the Recovery and Resilience Plan.
On the external front, Portugal’s situation is favorable due to its inclusion in the Eurozone and consistent current account surpluses. However, the study warns that “its status as an international debtor acts as a constraint on its credit rating”, as its net international investment position (-76% in 2023) still reflects the macroeconomic imbalances from the 2008 crisis. Therefore, EthiFinance Ratings notes that Portugal’s high level of external debt remains a concern, leaving the country vulnerable to external shocks”.
On the other hand, the Portuguese banking sector is in a strong position, “with solid capitalization and a CET1 ratio of 17.1% in 2023”, and a reduction in the non-performing loan (NPL) ratio, despite the ECB’s stringent monetary policy, which have benefited Portuguese institutions, with the return on assets (ROA) rising from 0.7% in 2022 to 1.5% in the first half of 2024. However, the report states that “these strengths are counterbalanced by the risks of credit overheating”, which, along with limited international influence and a GDP projection that remains below its potential, exert downward pressure.
In the ESG policy domain, the favorable assessment is supported by Portugal’s solid institutional framework and high governance standards, as well as a high level of social well-being. However, the study warns that “the ESG assessment is constrained by the environmental pillar”, which faces certain risks, especially regarding the green transition, as the country still presents high CO2 emissions levels.
Regarding social policies, the report highlights that “income and gender inequality slightly weaken Portugal’s social profile”. In 2023, the country recorded a Gini Index of 33.7 compared to 32 in 2022, influenced by the rising cost of living. Furthermore, gender disparities persist, with a 15.3 percentage point gap in employment between men and women during the same period, and EthiFinance Ratings points to rising housing prices as a significant challenge.
In terms of governance, the study underscores that “Portugal’s institutional quality and government effectiveness are high”, as demonstrated by the successful implementation of structural measures that have helped the country recover from the 2010 debt crisis. However, the report points to some persistent risks, such as the significant bureaucracy faced by businesses and the lingering presence of corruption, “which can discourage investment and erode trust in institutions”.
The Request for Comments period was launched on the 22th of July 2024 and was closed on 31st of August of 2024.
The Request for Comments affected the future EthiFinance Ratings’ DIF Rating Methodology. During this period no comments were received.
In order to extend the scope of the CRA Code of Conduct to areas of the EthiFinance Group that collaborate with CRA activity, the code has been updated.
EthiFinance Ratings is launching a request for comments for its new Debt Investment Funds Rating (DIF) methodology and is inviting market participants to submit their comments and suggestions.
The Request for Comments period is starting on 22nd of July and is expected to last until 22nd of August. Unless specified otherwise, these comments will be considered as public. Comments should be submitted at the following email address: rfc@ethifinance.com. The final version is expected to be published and implemented in Q4 2024.
This methodology details the process by which EthiFinance Ratings (EFR) assigns ratings to the debt issued by either the master fund (MF) which holds the underlying loans, or its corresponding feeder fund which has an interest/investment in the MF in the form of a limited partner (LP). The final rating will result from the assessment of the Anchor Rating and the Modifiers. The analysis will be split into these two phases. While this methodology provides a largely prescriptive approach to evaluate the DIF’s credit quality, EthiFinance’s analytical process also includes judgments made by analysts. The analysts must also consider the specifics of each case as well as comparisons with similar instruments. Therefore, this methodology should be understood as a general framework that EthiFinance analysts use in tandem with their expertise to arrive at the final rating.
EthiFinance Ratings, an independent European rating agency, has once again received the Analyst Forecast Awards from the economic analysis entity FocusEconomics, in the Fiscal Balance category for Spain, recognizing the company's work for the fourth consecutive year and for the third time in this specific category.
Specifically, the award recognizes EthiFinance Ratings' specific expertise and accuracy in Real Sector forecasting, as well as the company's analysts' in-depth knowledge of the specific factors that influence the sector and their ability to make accurate forecasts in this area.
“Our forecasting models are based on the use of complex macroeconomic techniques with external and internal data related to business behavior, the macroeconomic situation, etc., which allows us to have a clear and precise vision of the macroeconomic scenario in which our ratings operate in the medium and long term,” said Antonio Madera, Chief Economist and Chief Rating Officer of Sovereign, Structured and Financial Institutions EthiFinance Ratings.
This is not the first time EthiFinance Ratings has won an award from FocusEconomics, as in 2021 it received three first places in the General, Interest Rate and Fiscal Balance categories, as well as a fourth place in Gross Domestic Product. Furthermore, in 2022, it was awarded two first places in the General and Fiscal Balance categories, and a third place in the Current Account category. Finally, in 2023, the company was recognized as the second best forecaster in the General and Current Account categories.
The award-winning institutions include the most reputable international forecasting companies, joined once again by EthiFinance Ratings for the fourth consecutive year. The award thus consolidates the agency's position as an independent European rating agency and places it among the leading players in the sector.
To identify the best economic forecasters, FocusEconomics has evaluated the accuracy of the Real Sector forecasts submitted by more than 668 institutions to its Consensus Forecast survey over 22 months. Economists are evaluated on the average of their forecast errors for forecasts submitted to our monthly survey over the past 22 months. Errors are defined as the absolute difference between an individual forecast and the actual outcome of the macroeconomic indicator or commodity price.
In the words of Arne Pohlman, Chief Economist and Managing Director of FocusEconomics, in a note shared to EthiFinance Ratings to announce the award, “The FocusEconomics Analyst Forecast Awards celebrate the exceptional contributions of more than 1,500 economists from around the world who serve on our panel and produce and update reliable economic forecasts annually.”
The General Corporate Methodology is only a merger of the three existing frameworks and our rating criteria remain unchanged.
As of the 15th of July 2024, EthiFinance Ratings has decided to merge its Long-Term, Short-Term and Instruments Corporate Methodologies into a single General Corporate Methodology.
Therefore, we are withdrawing the aforementioned three frameworks and replacing them with the General Corporate Methodology.
Our decision pursues the simplification of our current Framework architecture and is based on the close interrelationships that exist between the three methodologies.
In fact, the Corporate Long-Term methodology is the necessary starting point when initiating a short-term or an instrument rating.
This rationalisation of our frameworks does not imply any changes in our rating criteria and therefore the ratings under these methodologies are not affected by this change.
EthiFinance Ratings has also seized the opportunity to slightly adjust the calculation of its distressed EBITDA in the case of instrument rating for sub-investment grade issuers.
This non-material change results in no change in the ratings as per the impact test that was carried out.
Pharma Companies are now analysed using the General Corporate Rating Methodology.
As of the 15th of July 2024, EthiFinance Ratings has decided to discontinue its Pharma Sector rating methodology. Pharma Companies are now analysed using the General Corporate Rating Methodology.
Our decision is based on the fact that Pharma companies can be adequately analysed, using our current General Corporate Rating Methodology, without the need for a sector-specific framework.
Currently, EthiFinanceRatings rates one pharmaceutical company whose rating has not been affected by this change.
EthiFinance, the innovative European rating, research and advisory group specializing in credit ratings and sustainable finance, updated today July 3rd, 2027, its website "ethifinance.com".
This refreshed online presence reflects the company's continued evolution and commitment to providing cutting-edge solutions in the field of sustainable finance and development and credit ratings.
The redesigned website offers a more user-friendly interface and showcases EthiFinance's comprehensive range of services, including ESG ratings, credit research, credit ratings and advisory solutions.
Visitors can now easily navigate the site to explore the company's history, values and diverse product offerings tailored for investors, companies and organizations seeking to address the challenges of financing and environmental and social change.
With a clean, modern design, the new site reaffirms EthiFinance's strong position as a leading European player in sustainable finance, highlighting the expertise of its various subsidiaries and its commitment to promoting responsible decision-making in the financial sector.
For questions, please use the contact form.
We have published on our website a new version of our Long-Term Sovereign Rating Methodology introducing material changes to the analytical framework, entering into effect today, 31st of May.
EthiFinance assigns sovereign ratings using a three-step process that blends qualitative and quantitative factors to ensure precise credit ratings:
- Model-Driven Anchor Rating: This initial rating is based on a PLS-VIP model using 38 key performance indicators across macroeconomic performance, public finances, and ESG factors.
- Qualitative Adjustments: These adjustments refine the anchor rating by considering additional risk factors, future trends, and qualitative aspects.
- Modifiers: Lastly, modifiers are applied for extraordinary events or unique features like reserve currency status.
As a novelty, we have included ESG considerations in our Criteria, both in the model-driven and qualitative adjustments parts, in addition to a specific ESG cap.
EthiFinance Ratings has maintained the rating of the Republic of Portugal at "BBB+" but has revised up its outlook to Positive from Stable.
The fiscal surplus that the country achieved in 2023 is expected to continue and contribute to the further reduction of the public debt/GDP ratio. Additionally, Portugal's unemployment rate is decreasing and its GDP per capita is gradually converging with that of the European Union average.
The primary obstacle to an improvement in the rating of Portugal is the high level of debt. Although there has been some progress, there are still certain risk factors that could affect public finances, such as social challenges that arise from an aging population, governance issues, and the fragmentation of the political landscape after the 2024 elections. These circumstances could make it difficult to implement the necessary structural reforms. However, economic fundamentals and continued fiscal prudence could lead to a credit rating upgrade within the next 12 months, hence the adjustment to the outlook.
The Portuguese economy slowed in 2023, with growth for the year of 2.3%. This was due to factors such as high inflation, the tightening of financing conditions, and the weakness of the economies of its main trading partners. The Bank of Portugal, for its part, forecasts growth of 2.0% for 2024 and 2.3% in 2025.
Despite the challenges faced by Portugal, the country has made significant progress on several fronts. It has significantly reduced the unemployment rate (from 16.4% in 2013 to 6.5% in 2023), which is expected to remain stable at around the current level in the coming years. In addition, the financial sector has undergone a remarkable restructuring, resulting in a significant reduction in non-performing loans, from 17.2% in 2015 to 2.7% in 2023, and an increase in the profitability of banks. Furthermore, Portugal achieved a budget surplus in 2023, which is expected to continue in the future, although at lower levels due to various factors such as a moderation in the pace of revenue growth and the implementation of new spending measures. Public debt has fallen below 100% of GDP in 2023, and this trend is also expected to continue.
Our analysis regarding the ESG profile of the Republic of Portugal highlights the increase in renewable energy consumption (34.6% of total energy consumed in 2022) and highlights its upward trend. Similarly, on the social aspect levels of wealth and well-being have improved in recent years and the country is converging towards the European Union average level of GDP per capita, although it is still below (68% in 2023). However, again the country faces the problem of an aging population, with high dependency rates, which is likely to hamper further convergence.
Regarding the external sector, Portugal has managed to correct external imbalances in recent years. Specifically, the country has managed to generate surpluses in its current account, which has enabled it to reduce its debt position. As a result, Portugal's external debt has fallen to 150% of GDP in 2023.
In summary, for EthiFinance Ratings the outlook for Portugal is positive. The country's strong fiscal position, characterized by budget surpluses, has had a positive impact on its credit rating, with a significant reduction in public debt. While Portugal still faces challenges, such as high levels of debt and social and governance issues, EthiFinance Ratings sees the potential for a credit rating upgrade within the next 12 months.
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EthiFinance Ratings has amended its Credit Rating Disclosure Policy to allow public viewing of unsolicited credit ratings for Financial Institutions and Insurance Companies. With this decision, EthiFinance Ratings aims to increase transparency and accessibility of our credit ratings for the financial sectors, while preserving the "subscription distribution" model exclusively for corporate credit ratings. The change will take effect today, Wednesday 24th of April.
EthiFinance Ratings ha afirmado su calificación en A- con tendencia Estable al Ayuntamiento de Barcelona tomando en cuenta la elevada dependencia de los recursos procedentes de la Administración Central y la situación social de la ciudad, que presenta tasas de desempleo más bajas y niveles de PIB per cápita por encima de la media nacional. Además, hace referencia a nuevos retos para la economía, como la vulnerabilidad de la región frente a la escasez hídrica y el aumento del coste de vida.
En 2023, la ciudad ha mantenido un buen ritmo de crecimiento económico. Sin embargo, su crecimiento fue ligeramente inferior al promedio nacional durante el año. Asimismo, proyectamos un crecimiento del PIB municipal en torno al 2,3% en 2023 para Barcelona, ligeramente por debajo del 2,5% nacional. Además, se espera un crecimiento económico del 2,4% y 1,8% para este y el próximo ejercicio, superando las expectativas de EthiFinance Ratings para España (1,9% y 2%), impulsado por el dinamismo del mercado laboral y el sector turístico.
En cuanto al bloque social, el municipio de Barcelona se posiciona en el rango alto de la calificación de EthiFinance debido a sus niveles de PIB per cápita sustancialmente por encima de la media nacional y una tasa de desempleo del 6,1% en el último trimestre de 2023, la más baja desde 2007. No obstante, la agencia crediticia advierte de elementos negativos como la dualidad del mercado de trabajo, además de la elevada tasa de paro juvenil y de dependencia.
En lo que respecta a las finanzas públicas, EthiFinance Ratings subraya la sólida posición fiscal y de liquidez del Ayuntamiento, en línea con los últimos años, y que se ha reafirmado con los resultados de la liquidación del ejercicio 2023, con un resultado presupuestario más favorable de lo inicialmente previsto. El municipio mantiene un nivel de ahorro bruto positivo y se espera que continúe esta tendencia hacia la contención del gasto operativo.
Por otra parte, la propuesta de presupuestos para 2024 mantiene las líneas de prudencia que el consistorio viene mostrando, pero los gastos están aumentando, mientras que los ingresos por capital muestran una contracción del 58,7% respecto al 2023, sobre todo por el cese de transferencias como las de los Fondos NGEU. A pesar de ello, no existen riesgos materiales a corto plazo. La deuda pública sigue aumentando, aunque se mantiene por debajo del límite propio del 60%. También los plazos de pago a proveedores son muy bajos.
Institucionalmente la incertidumbre ha sido elevada, dado que el Gobierno carece del respaldo suficiente para hacer frente a la aprobación de los presupuestos de 2024. Esto ha supuesto la tramitación de los presupuestos a través de una vía extraordinaria que implica el sometimiento del actual alcalde a una cuestión de confianza. Por lo tanto, se pone en evidencia que la alta fragmentación parlamentaria del consistorio complica la implementación de medidas y la previsibilidad política, aspectos que evaluamos negativamente desde EthiFinance Ratings.
Por último, el ámbito medioambiental y social del Ayuntamiento de Barcelona muestra avances, aunque se enfrenta a retos significativos. El Ayuntamiento ha promovido iniciativas significativas como el Compromiso ciudadano por la sostenibilidad 2012-2022, el Barcelona Green Deal y el Plan de sostenibilidad turística. No obstante, Barcelona afronta desafíos significativos como la histórica sequía que ha impactado a Cataluña y que ha evidenciado la necesidad de una gestión sostenible de los recursos naturales y la colaboración sectorial.
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EthiFinance Ratings, the European credit rating agency, has affirmed the rating of the Kingdom of Spain at "A-" with a stable outlook, supported by its most recent exhaustive analysis of the country's economic and financial situation.
This credit rating confirmation comes from the positive GDP growth outlook for 2023, estimated to reach 2.4%, and on the downward trend in inflation, which remains at 3.4%, although still above the long-term inflation target set by the central bank.
It is noteworthy that Spain's public debt has decreased to 109.8% of GDP at the close of the third quarter of 2023, while in terms of the cost of debt, a significant rebound in the average cost has been observed to 2.08%, exceeding the 1.64% recorded in 2021.
In any case, EthiFinance Ratings also highlights the persistence of downside risks that could affect the Kingdom of Spain's credit rating going forward. These risks include worsening geopolitical risks in Europe and the Middle East, which could impact inflation correction and monetary policy; a deeper-than-projected economic slowdown; continued high interest rates, which would hinder access to financing; and parliamentary fragmentation in Spain that could complicate the legislature.
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EthiFinance Ratings has affirmed the BBB+ rating with a stable trend to the Republic of Portugal. The rating agency's assessment reflects the country's rapid economic recovery seen in 2021 and 2022, which in 2023 has persisted at a more moderate pace.
The rating also considers the positive impact of the NGEU Funds on medium-term growth potential, although it highlights the need to address public debt, which still remains at high levels.
Similarly, it highlights that the Portuguese economy has strengthened its post-COVID-19 recovery, with a +6.9% y-o-y growth in 2022 and reaching pre-pandemic GDP levels. Furthermore, it notes that despite a robust start to the year in 2023, domestic demand and tourism experienced a slowdown in the second and third quarters due to inflation, tighter financing conditions, and weakness in the economies of its major trading partners.
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EthiFinance Ratings ha mantenido la calificación BBB+ con tendencia estable a la Xunta de Galicia a pesar de los desafíos económicos globales.
Este rating se fundamenta en el perfil socioeconómico estable del Gobierno gallego, que, a pesar de mantenerse por debajo de los niveles nacionales en términos de crecimiento y PIB per cápita, se espera que en 2024 crezca a un ritmo similar al nacional. A pesar de algunos desafíos en el mercado laboral y el reto demográfico, se destaca el mantenimiento de tasas de desempleo por debajo de la media nacional.
En el ámbito económico, después de una pronta recuperación en 2021, la economía gallega experimentó un crecimiento más contenido en 2022. Aunque se proyecta un crecimiento más moderado en los próximos años, se espera que la economía gallega crezca al +1,8% en 2023 y +1,9% en 2024, alineándose con el panorama nacional.
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We have published on our website a new version of our Long-Term Corporate Rating Methodology, introducing non-material changes to the analytical framework while preserving the core of its original methodological criteria. Additionally, a new annex (Annex “I”) addresses our approach to rating Hotels which replaces our specific Hotel Sector Methodology.
Response to comments related to the Sovereign Rating Methodology.
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- Response to comments related to the Sovereign rating methodology
EthiFinance Ratings has affirmed Spain's unsolicited credit rating at "A-" with a stable trend. The assessment, performed at the second annual review, reflects the agency's perception of the country's risk profile, which remains stable according to its rating methodology.
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EthiFinance has launched its new Project Finance Methodology, entering into effect today, 21st of July, 2023. Material changes have been made to improve and clarify our Project Finance Framework. As a novelty, we have included ESG considerations in our Criteria and have added Physical Risks as a new rating factor.
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The Request for Comments period was launched on the 8th of June 2023 and was closed on 8th of July of 2023.
The Request for Comments affected the future EthiFinance Ratings’ Sovereign Methodology. During this period we have received a comment that will be answered publicly in the coming days.
EthiFinance Ratings is launching a request for comments for its Sovereign Long-Term Rating methodology and is inviting market participants to submit their comments and suggestions.
The Request for Comments period is starting on 8th of June and is expected to last until 8thl of July. Unless specified otherwise, these comments will be considered as public. Comments should be submitted at the following email address: rfc@ethifinance.com. The final version is expected to be published and implemented in Q3 2023.
This proposed methodology is based on a combination of qualitative and quantitative factors through an expert-based model approach. More specifically, our methodology relies on the determination of an anchor rating through the use of a partial least squares model combined with variable importance projection (PLS-VIP) that takes into account, for each sovereign, a set of key performance indicators (KPIs) distributed across three pillars and eight sub-pillars. In a second step, we apply a series of qualitative adjustments to the anchor rating for each of the sub-pillars to include in the analytical process all those qualitative factors that are not part of the model.
In its May review, EthiFinance Ratings upgrades the Republic of Portugal's unsolicited credit rating from BBB to BBB+ with a Stable outlook. The European rating agency considers that the Portuguese economy will grow by 2.7% this year, according to the European Commission's forecasts. This rating improvement is based on the "rapid" economic recovery during 2021 and 2022, as well as on the correction of certain imbalances in public finances and the financial system consolidation carried out last years. It also emphasizes the favorable evolution of the Portuguese labor market, which last year reduced its unemployment rate to 6% of the active population, seven tenths of a percentage point less than at the end of 2021. However, the rating is limited by the high level of public debt which, despite the downward trend observed in recent years, will be above 110% at the end of this fiscal year 2023.
The Request for Comments period was launched on the 17th of March 2023 and was closed on 17th of April of 2023.
The Request for Comments affected the future EthiFinance Ratings’ Project Finance Methodology. During this period no comments were received.
EthiFinance Ratings is launching a request for comments for its Project Finance Ratings methodology and is inviting market participants to submit their comments and suggestions.
The Request for Comments period is starting on 17th of March and is expected to last until mid-April. Unless specified otherwise, these comments will be considered as public. During that period, we will also reach out to rated issuers to explain the new methodologies and obtain feedback. Comments should be submitted at the following email address: rfc@ethifinance.com. The final version is expected to be published and implemented in Q2 2023.
This proposed methodology incorporates a scorecard with changes in the analytical factors and the weights given to them. We introduce an ESG analysis with selected KPIs correlated to the credit quality of the rated entity, including the integration of physical risks into credit ratings. Also, we present further refinements and clarifications in order to provide additional transparency and clarity regarding our methodology.
In its February review, EthiFinance Ratings maintains the unsolicited rating of the Kingdom of Spain at A- with an improved outlook from Under-observation to Stable. This change is based on the stronger growth of the Spanish economy during the preceding financial year (5.5% compared to the expected 4.3%), avoiding recession in the last quarter, as well as the slowdown of inflationary pressures and a more favorable situation in the energy markets than expected. However, both factors are closely linked to the geopolitical situation, which is a factor of uncertainty that could put current forecasts at risk.
In its November review, EthiFinance Ratings maintains Portugal's unsolicited credit rating at BBB with a change of outlook from stable to positive “due to the good performance of both the socio-economic and fiscal situation” as well as the “stability in the Portuguese government” headed by Antonio Costa, who reached an absolute majority in the early elections of January 30.
In its October review, EthiFinance Ratings maintained the city of Madrid's unsolicited credit rating of A- trending Under Observation.
In its October review, EthiFinance Ratings maintained the city of Barcelona's unsolicited credit rating of A-trending Under Observation.
In its September review, EthiFinance Ratings maintains the unsolicited rating of the Kingdom of Spain at A- with an Under-observation outlook. Despite the situation of uncertainty that economies are facing, the rating assesses both the positive growth that has been observed in 2021 and that has had continuity in the first two quarters of the year, and the impact of the Next Generation Funds, whose investments shall aim mainly to sectors of the productive economy with high added value (technology and industry, among others), the recovery of tourism activity, with an annual increase in tourism expenditure of 271.3%, and the dynamism of the labor market.
La période de consultation lancée le 8 juillet 2022 pour les trois nouvelles méthodologies d'EthiFinance Ratings sur les notations des fournisseurs de logements sociaux, les notations des holdings d'investissement et les notations des transactions immobilières commerciales a expiré, la consultation se terminant le 25 août.
Aucun commentaire n'a été reçu pour cet avis au cours de la période ouverte. Les versions finales devraient être publiées et mises en œuvre au quatrième trimestre 2022.
Les nouvelles méthodologies proposées couvrent les nouvelles catégories d'actifs suivantes : i) Holdings d'investissement : une entité juridique ou un groupe dont l'objectif principal est de détenir un portefeuille d'investissements. ii) Fournisseurs de logements sociaux : une entité juridique ou un groupe qui opère en tant que propriétaire et exploitant de logements sociaux, iii) Transactions immobilières commerciales : un véhicule ad hoc autofinancé ou une société holding dont l'activité se limite à la propriété d'un véhicule ad hoc dont le service de la dette est assuré par les revenus locatifs générés par l'actif immobilier sous-jacent ou par la cession de l'actif, ou par un mélange des deux.
The Request for Comment period launched on 8 July 2022 for EthiFinance Ratings' three new methodologies on Social Housing Providers Ratings, Investment Holding Ratings and Commercial Real Estate Transactions Ratings has lapsed, with the consultation closing on 25 August.
No comments have been received for this notice during the open period. The final versions are expected to be published and implemented in Q4 2022.
These proposed new methodologies cover the following new asset classes: i) Investment Holdings: a legal entity, or a group, with the primary purpose of owning a portfolio of investments. ii) Social Housing Providers: a legal entity, or a group, operating as an owner and operator of social housing, iii) Commercial Real Estate Transactions: a self-financing special-purpose vehicles (SPVs) or holding companies with activity limited to ownership of an SPV whose debt is serviced via the rental income generated by the underlying real estate asset or via the disposal of the asset, or a mix of both.
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.
The Request for Comment period launched the 7th of July 2022 for the new EthiFinance Ratings methodology on Reverse Mortgage Structure Finance Ratings has lapsed, with the consultation closing on 25 August.
No comments have been received for this notification during the open period. The final version is expected to be published and implemented in Q4 2022.
The document corresponds to the RfC and is provided for information purposes.
In its May review, EthiFinance Ratings maintained the city of Madrid's unsolicited credit rating at A- with a rating of A-. unsolicited credit rating for the city of Madrid at A- with a change in Trend from Stable to On Watch.
In its May review, EthiFinance Ratings maintained the city of Barcelona's unsolicited unsolicited credit rating of the city of Barcelona at A- with a change in Trend from Stable to On Watch.
You can access to the Notification Madrid.
You can access to the Notification Barcelona.
The Agency plans a minor change to its long-term rating scales. The current scales consist of 22 notches plus Default, from AAA to D, plus the Default level. The proposed new scales maintain the 22 notches, but the D level corresponds to a Default. The change is minor and has no impact on our long-term rating portfolio as none of them are assigned a D rating.
In its June review, EthiFinance Ratings maintained the unsolicited rating of the Community of Madrid at A- with a Negative trend due to the favorable rating of the Community of Madrid at A- with a Negative trend due to the favorable evolution of the regional economy over the past fiscal year 2021.
In its June review, EthiFinance Ratings affirms the Republic of Portugal's unsolicited credit rating in BBB for the positive performance of the Portuguese economy in both 2021 and the first quarter of 2022, mainly explained by the recovery of domestic demand. In this regard, the report supports the 5.8% growth forecast by the European Commission for the Portuguese economy, a figure already advanced in January's review by the European credit rating agency. The report also values the strength of the Portuguese labor market, whose unemployment rate fell to 5.9% at the end of the first quarter, one point lower than at the end of last year. However, the European rating agency warns of the risk posed by the high levels of inflation and public debt (120.7% of GDP by the end of 2022).
In its June review, EthiFinance Ratings maintained its unsolicited rating on the autonomous community of Galicia at BBB+ with a Stable trend.
In its march review, EthiFinance Ratings (formerly Axesor Rating) maintains the credit rating of the Kingdom of Spain at A- Under Observation. The credit rating considers the good evolution of the Spanish economy and public finances during the financial year 2021, even considering that pre-pandemic levels have not been reached yet. In addition, a positive impact is expected from investments financed by European Funds which are included in the Recovery, Transformation and Resilience Plan. It takes into account that Brussels is expected to release EUR 18 billion from these funds this year, in addition to the EUR 19 billion received last year.
Axesor Rating confirms the Republic of Portugal's unsolicited rating at BBB with a stable outlook.
Axesor Rating maintains the rating of the Community of Madrid in A- with negative trend.
In its January review Axesor Rating maintains the unsolicited rating of the autonomous community of Galicia in BBB with a stable trend,
Comments related to the commercial real estate transactions rating methodology
In its November review Axesor Rating maintains the city of Madrid's unsolicited credit rating at A- with stable trend. Despite the capital growth potential of Spain, there is a slowdown in the evolution of both private consumption and the tourism sector, limiting GDP growth to 4.7%, in line with forecasts for Spain.
In its November review Axesor Rating maintains the city of Barcelona's unsolicited credit rating in A- with stable trend. The rating also takes into account the expansionary character of the 2022 Consistory's draft accounts, noting the importance of public investment for recovery.
Following Axesor Rating's growth plan, Axesor has reviewed the insurance companies rating methodology.
Axesor has not received any comments for this notification during the open period designated for allegations and comments.
Following Axesor Rating's growth plan, Axesor has started the development of a common framework to analyse the creditworthiness of non financial corporates.
Axesor has not received any comments for this notification during the open period designated for allegations.
In its six-monthly review, Axesor confirms the rating of Chile at A- with a stable outlook and raises the growth forecast of the Chilean economy to 10.9% this year. The European rating agency highlights the fast recovery in private consumption fostered by the fiscal impulse provided by the Government of Chile. Looking towards 2022, economic growth is expected to normalize to 2.4%. In turn, the report points to the progressive decline in the unemployment rate, which, although closing by 9% in 2021, will recover pre-pandemic levels by the end of next year. The rating also values the moderate level of net public debt, which will stand at 19.8% on a net basis at the end of. However, it warns of the worsening of public deficit levels to -7.9% this year. In addition, Axesor Rating alerts about the excessive dependence of the evolution of both the price of copper and the economies of China and the United States, its main trading partners.
The unsolicited credit rating of the Kingdom of Spain of A- with a stable outlook values the progress of the Spanish economy during the second and third quarters of 2021 -in parallel to the evolution of the vaccination campaign-, which has allowed a relaxation of the limitations to mobility and the gradual return to normality in the sectors most affected by the pandemic.
Axesor Rating maintains the rating of the Community of Madrid in A- with negative trend.
In its July review Axesor Rating maintains the unsolicited rating of the autonomous community of Galicia in BBB+ with a stable trend, due to the potential of recovery presented by the region's economy during this second semester of the year, as well as for the foreseeable acceleration throughout 2022
Axesor Rating confirms the Republic of Portugal's unsolicited rating at BBB with a stable outlook.
In its May review Axesor Rating maintains the unsolicited credit rating of the city of Madrid of A- with a Stable trend for the expected recovery from the second half of this year 2021, which will raise the growth rate of the municipality to 6%.
In its May review, Axesor Rating maintains the unsolicited credit rating of the city of Barcelona with a stable trend, due to the expected recovery from the second half of this year 2021, With an economy that will grow online or even above that of Spain as a whole.
In its April review, Axesor Rating confirms the credit rating of Chile at A- with stable outlook because of the economic growth outlook for 2021 and 2022, driven by a marked improvement in private consumption and the foreign sector. The European rating agency estimates that GDP will grow by 6.2% and 3.8% in 2021 and 2022, respectively. In turn, these rates will allow the labor market to recover, with the unemployment rate falling by more than two percentage points by 2022. The note positively values the moderate level of public debt, which will be around 33.6% at the end of 2021, and the expectations of reducing the public deficit from 8% to levels of -5% and -2.8% throughout this year and next. However, Axesor Rating warns of the excessive dependence on copper both in the public accounts and in the current account balance, as well as the high levels of debt of the private sector.
Axesor Rating maintains its unsolicited rating on the Kingdom of Spain to A- with stable outlook. The European rating agency expects a gradual recovery of the Spanish economy from the second half of 2021, both because of the evolution of the immunization schedule that will allow the recovery of activity, especially in the sectors most affected by the restrictions (hospitality, leisure, and tourism) as well as for the reception of 140 billion euros from the European recovery fund (European Next Generation) that will boost the national economy and whose conditionality and orientation towards projects that foster a sustainable economy will help improve the competitiveness and productivity of the productive fabric, boosting the national economy.
Axesor Rating maintains the rating of the Community of Madrid in A- with negative trend.
In the first credit rating report on the Galician autonomous community, Axesor Rating has given a BBB+ rating with a stable trend.
Axesor Rating downgrades Portugal’s unsolicited rating to BBB with a Stable outlook.
Following Axesor Rating's growth plan, Axesor has started the development of a common framework to analyse the creditworthiness of nonfinancial corporates. This report describes the Axesor Rating's methodology to rate these companies.
Axesor has not received any comments for this notification during the open period designated for allegations and comments.
Axesor Rating has assigned an unsolicited rating of A- with a stable outlook to the Republic of Chile in the initial rating report of the country.
Axesor Rating has downgraded its unsolicited rating on the Kingdom of Spain to A- with stable outlook due to the deep decline that the health crisis is causing on the economy and the public finances.
Axesor Rating affirms the credit rating of the Community of Madrid at A- with a change to negative outlook due to the foreseeable impact of COVID-19 over the economic performance and the public finances.
Axesor Rating publishes the sovereign rating of the Republic of Portugal, assigning it a BBB with a stable outlook.
Axesor Rating maintains the unsolicited credit rating of the Council of Madrid & City Council of Barcelona at A. Outlook has been changed to Under Observation from Stable due to the impact of COVID-19.
Axesor maintains Spain’s unsolicited sovereign rating at A. Outlook has been changed to under observation from stable due to the economic uncertainties for 2020.
From Axesor Rating we inform you that we have updated our website as well as its infrastructure.
Dear customers,
Following the Coronavirus spread alert (Covid-19), we want to assure you that Axesor Rating has taken steps to ensure the well-being of our customers and professionals.
Our team of analysts continues to work at full capacity with two main objectives:
- To provide the best service to our customers in a personalized manner
- Conduct comprehensive situation tracking for up-to-date economic information
Our team has the necessary training and experience to continue working in a telematic way, being at your disposal to answer any questions that may arise and, as usual, you can count on us to provide periodical updates of research, comments and analysis.
From Axesor Rating, we are confident that the joint, responsible and coordinated work of the authorities, businesses and citizens will enable this crisis to end as soon as possible. We are convinced that we will be strengthened to face the future with enthusiasm and appreciation for everyday life.
Respectfully,
Axesor Rating
Following Axesor Rating's growth plan, Axesor has started the development of a specific methodology to issue rating for Receivables based on Utility Cost Recovery charges. This report describes the Axesor Rating's methodology to rate these califications.
Axesor has not received any comments for this notification during the open period designated for allegations and comments.
Axesor Rating affirms the credit rating of the Autonomous Community of Madrid at A- with stable outlook.
Axesor upgrades Portugal's unsolicited rating to BBB+ with a stable outlook.
Following Axesor Rating's growth plan, Axesor has started the development of a specific methodology to issue rating for Hotel Industry. This report describes the Axesor Rating's methodology to rate Hotel companies.
Axesor has not received any comments for this notification during the open period designated for allegations and comments.
Following Axesor Rating's growth plan, Axesor has started the development of a specific methodology to issue rating for Pharmaceutical Industry. This report describes the Axesor Rating's methodology to rate Pharmaceutical companies.
Axesor has not received any comments for this notification during the open period designated for allegations and comments.
Axesor assigns the city of Madrid an unsolicited credit rating of A with Stable outlook and the city of Barcelona an unsolicited credit rating of A with Stable outlook.
From Axesor Rating we inform you that we have migrated our infrastructure to a cloud service.
From Axesor Rating we inform you that from today we have a new domain: www.axesor-rating.com.
Axesor Rating publishes the sovereign rating of the Spain, assigning it an 'A' with a stable outlook.
Following Axesor Rating's growth plan, Axesor has started the development of a specific methodology to issue ratings for Non-Performing Loans (NPL) transactions. This report describes the Axesor Rating's methodology to rate NPL transactions.
Axesor has not received any comments for this notification during the open period designated for allegations and comments.
Axesor Rating publishes the sovereign rating of the Republic of Portugal, assigning it a BBB with a stable outlook.
Following Axesor Rating's growth plan, Axesor has started the development of a specific methodology to issue ratings for Insurers. This report describes the Axesor Rating's methodology to rate Insurers.
Axesor has not received any comments for this notification during the open period designated for allegations and comments.
Axesor Rating releases its new range of sovereign and sub-sovereign ratings assigning A rating with stable outlook to the Kingdom of Spain.
In line with Axesor's growth plan, the CRA Code of Conduct has been updated.
In line with Axesor's growth plan, the CRA Code of Conduct has been updated in order to incorporate the newly developed products and respective requirements.
Following Axesor Rating's growth plan, Axesor has started the development of a specific methodology to issue ratings for Trade Receivables transactions. This report describes the Axesor rating's methodology to rate Trade Receivables transactions backed by accounts receivables.
Axesorhas not received any comments for this notification during the open period designated for allegations and comments.
Axesor Rating's growth plan started the development of a specific methodology for the issuance of ratings for Consumer ABS operations. This report describes Axesor's methodology for the analysis of ratings for ABS Consumer operations backed by consumer loans, car loans, and leasing.
Axesor has not received any comments for this notification during the open period designated for allegations and comments.
Axesor Rating's growth plan started the development of a specific methodology for the issuance of ratings for SME CLO Operations. This report describes Axesor's methodology for the analysis of the credit risk inherent in collateralised loan obligations for small and medium enterprises.
Axesor has not received any comments for this notification during the open period designated for allegations and comments.
Axesor Rating's growth plan started the development of a specific methodology for the issuance of ratings for Structured Financial Products (Asset Backed Securities). Corporate securitisations allow for the diversification of sources of financing for businesses using asset backed securities, for example, securitising auto loans, loans for receipts to companies, inventories, or receipts, among others.
Axesor has not received any comments for this notification during the open period designated for allegations and comments.
Axesor Rating's growth plan started the development of a specific methodology for the issuance of ratings for financial products, such as bonds. The main objective of said methodology is to issue ratings which measure the credit quality associated with a specific financial product, taking into account not only the solvency of the issuer, but also the characteristics of the product itself.
Axesor has not received any comments for this notification during the open period designated for allegations and comments.
Axesor Rating's growth plan started the development of a specific methodology for the issuance of corporate ratings for those companies whose sole activity is construction, management and/or the undertaking of singular projects whose financing does not have recourse to the parent company. Said projects may be both private and public (Public Private Project).
Axesor has not received any comments for this notification during the open period designated for allegations and comments.
Axesor updated its rating scale to include notches for all of its ratings. This change incorporated a greater granularity for the scale, allowing us to know the level of relative importance of each rating within a risk level.
Axesor has not received any comments for this notification during the open period designated for allegations and comments.
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