A Time for New Dynamism

A Time for New Dynamism


We live in a time of constant technological advances and rapid global integration of markets, asset classes and economic/political systems. This demands that credit ratings, which facilitate the efficient allocation of global capital, must be based on dynamic, adaptive and continuously reviewed approaches. Innovative methodologies and robust internal governance are at the heart of ARC Ratings’ rating philosophy.

 

ARC Ratings' Origins

On October 7, 2013 the Portuguese rating agency Companhia Portuguesa de Rating, S.A., a twenty-five years old European credit rating agency, was legally converted into ARC Ratings, S.A.. As a result of this transformation, ARC Ratings added the know-how and experience of other rating agencies to its own, becoming a hub of the know-how and experience of this four-members partnership. ARC Ratings’ global ratings partners are:

  • CARE Ratings Ltd. - India;
  • Global Credit Rating Company Limited ("GCR") - Africa; and
  • SR Rating – Prestação de Serviços, Ltda. – Brazil.

 

ARC Ratings, S.A. is registered with the European Securities and Markets Authority (ESMA).

This global partnership (Our Arc of Parners) pools decades of industry experience and ratings expertise from four continents.




 

 

In response to the United Kingdom's exit from the European Union, ARC Ratings, S.A., has set up its United Kingdom office as a fully-fledged Credit Rating Agency, ARC Ratings (UK) Limited, which is registered as a Credit Rating Agency with the United Kingdom's Financial Conduct Autority (FCA).

 

Based on its global reach, local expertise and network-based approach and conscious of the need for constant reinvention, ARC Ratings enters the race for optimizing the allocation of the world’s capital by introducing innovative approaches and strategies, such as:

 

Medium-Sized Financial and Non-Financial Corporate Issuers

In many markets, medium-sized enterprises have more limited access to international credit ratings. There are many reasons for this, among them: cost of ratings and sometimes a lack of local expertise by the incumbents to understand this sometimes more complex market segment. ARC Ratings’ partners have gathered extensive experience in attaching national ratings to medium-sized financial and non-financial enterprises and ARC Ratings will leverage this local insight to expand the access of medium-sized enterprises to international credit ratings. This will increase capital market access of these enterprises and ultimately improve the efficiency of global capital allocation.

 

Reconstitution of the Rating Scale

ARC Ratings adopts an international rating scale which, instead of grouping the ratings into two categories, namely "investment-grade" and "non-investment grade", as is common practice, rather groups the ratings into four categories. These are "low risk", "moderate risk", "high risk" and "imminent or actual default". Ratings are opinions and investors as well as issuers are better served by defining the particular risk an issue may carry rather than suggesting that such rating gives the respective issue "investment-grade quality". Different investors have different risk appetites and ARC Ratings approach aids them to self-assess the risk and reward of individual issues as well as their overall portfolio in making their investment decisions.

 

 

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