Sovereign and public finance ratings

Sovereign

With our distinctive approach to sovereign credit assessment, we assign two types of ratings: sovereign government credit ratings and country credit environment ratings. The former rating reflects Rating-Agentur Expert RA GmbH assessment on the ability of the government to fulfill in due time its financial obligations, while the latter indicates our assessment on the level of recovery of investments in government and private debt obligations in the country, as well as the quality of the credit climate.

Regions

Our analytical models are designed based on the specific fundamentals of the regions located in the Russian Federation and CIS countries. Our methodology focuses on three main risk factors: economic risk, financial risk and political risk. While assessing these factors, we evaluate the regions’ revenues, expenses, liquidity gap and their political environment. We use both quantitative and qualitative methods to understand the current and potential risks and assign a rating which reflects mid-term creditworthiness of the region.

Corporate ratings

Banks

As part of RAEX Group of Rating Agencies, we have acquired and constantly developed a vast knowledge of the banking sector in CIS region with a special focus on the Russian market. This region is comprised of more than 600 banks with asset values of 1.2 trillion USD as of June 2016. We provide clients with professional and accountable credit risk research and analytics.

Rating-Agentur Expert RA GmbH conducts rating actions on the basis of three main analysis factors: market position, financial risks and corporate governance and risk management. Since the creditworthiness of a banking institution depends also on systemic risks, ratings are adjusted for internal and external support/stress-factors, as well as for the sovereign rating assigned to the country where the bank performs most of its operations. The rating reflects our evaluation of the bank’s ability to completely fulfill its financial liabilities in a timely manner. Our criteria considers a combination of the latest banking industry regulations in the post-crisis world and a series of factors adjusted for the entity’s peer institutions.

Insurance companies

For insurance companies, we assign reliability ratings after judging external factors of stability and corporate governance, company financial indicators, and those applying specifically to the insurance business (insurance portfolio, client base, reinsurance policy, etc.). Furthermore, the score is adapted depending on whether or not support/stress-factors apply. The rating is finally adjusted by the country credit environment rating for the country in which the insurance company operates, taking into account the intrinsic risk of the system and the economy.

Corporates

By examining three pillars of a non-financial corporation (business risk, financial risk, and corporate risk), we assign a credit rating which represents the opinion of Rating-Agentur Expert RA GmbH on the ability of the company to completely fulfill its financial liabilities in a timely manner, taking into account external support/stress-factors. The main users of the rating are creditors, but it is also valuable to investors and counterparties of the company whose interests depend on the full and timely fulfillment of the company’s liabilities.