What do you mean by Credit Rating? Explain the salient features of Credit Rating. Discuss the code of conduct prescribed by SEBI to Credit Rating Agencies.

Credit Rating: Definition and Key Features

Definition:

Credit rating is an assessment of the creditworthiness of a borrower, whether an individual, corporation, or government. It reflects the ability and willingness of the borrower to repay debt obligations in full and on time. Credit ratings are typically assigned by credit rating agencies (CRAs) and expressed through ratings that range from high credit quality to low credit quality.

Credit ratings play a crucial role in the financial markets by providing investors with a standardized measure of risk associated with different debt instruments. They help in pricing bonds and other debt securities, as well as influencing the interest rates that issuers must pay to attract investors.

Salient Features of Credit Rating:

1. Rating Scales:
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