Which rating agency is the best?

KBRA

KBRA has quickly become a major player in the credit rating industry since its launch in 2010. Known for being a global, full-service rating firm, they focus on developing new standards for risk evaluation while improving existing ones. Key features and solutions:

• KBRA Analytics offers deep data analysis for investment and debt decisions
• The KBRA Credit Profile (KCP) specializes in commercial mortgage-backed securities (CMBS) analysis. According to Statista, Citibank, Wells Fargo Bank, and Goldman Sachs were the three biggest CMBS lenders in the U.S. in the first half of 2023, with Citibank leading at 20% of issued CMBS.
• KBRA DLD and KFI focus on private credit markets
• KBRA Credit Assessment provides confidential creditworthiness evaluations
• KBRA Fund Ratings assess investment fund quality
• KBRA’s Indicative Rating offers theoretical analysis for borrowing requests

With over 77,290 ratings and $3.79 trillion in rated issuance, KBRA maintains a strong presence in both U.S. and European markets through offices in New York, Chicago, Dublin, London, and other major cities. Their commitment to transparency and client-focused solutions has earned them trust among businesses dealing with complex credit risks.

S&P Global

S&P Global’s market presence is impressive, with over 1 million outstanding credit ratings and over 1,500 credit analysts worldwide. The financial analysis firm’s coverage extends across over 150 countries, making it a global force in credit rating services. Its ability to maintain consistent quality across such a broad spectrum of ratings has merited the trust of 95% of the world’s top institutional investors.

S&P Global’s offerings deliver sophisticated credit rating options tailored to different needs. Public ratings provide broad market exposure, while private ratings offer more discrete financial communication to up to 150 specified parties. If your organization upholds internal standards, this CRA’s confidential scoring system delivers practical insights without public disclosure.

A 150-year legacy in the financial markets has given S&P Global the unique experience that comes with age to recognize market cycles and trends. Its analytical excellence is evidenced in its forward-looking analysis, which combines historical data with predictive modeling to provide nuanced views of credit risk. This approach has made it especially valuable for businesses seeking to understand their position in rapidly evolving markets.

Moody’s

With over 115 years of experience, Moody’s is among the top names in the credit rating sector. The highly rated CRA has acquired the title “Agency of Choice” following accreditation by Extel, previously Institutional Investor, thanks to a 13-year consecutive winning streak as the “Best Credit Rating Agency.”

Moody’s comprehensive approach to market analysis sets it apart in the industry. Its database of over 450 million companies provides unparalleled depth analysis, enabling it to offer contextual insights beyond simple credit estimates. Integrating cloud-based SaaS solutions for banking, insurance, and KYC workflows demonstrates Moody’s commitment to technological innovation while maintaining its traditional analytical rigor.

The firm’s focus on offering exponential risk is relevant in today’s interconnected global markets. It has developed sophisticated methodologies for analyzing cross-border risks, environmental impacts, and emerging market dynamics. This comprehensive approach makes Moody’s particularly valuable for businesses operating in complex, multinational environments.

Fitch Ratings

Drawing from a century’s worth of experience, Fitch Ratings has carved out a niche in the transnational rating industry. The agency continues to be recognized as one of the best credit rating firms by international and regional organizations. The highly accredited CRA has been awarded numerous accolades, reflecting its mission to provide expert analysis to capital market participants.

Fitch’s Credit Opinions (COs) provide detailed analyses of predefined scenarios to inform specific transactions or internal assessments. While more limited in scope than full ratings, COs provide industry-specific insights that help streamline even the most complex borrower profiles. Its credit appraisal technique considers the following criteria to define the creditworthiness of any size business:

• Credit behavior
• Potential outcomes of debt repayment
• The latest credit market research
• Historical observations of middle market dynamics

This CRA’s analytical rating strategy, commitment to ongoing service-delivery improvement, transparent systems, and customizable market-leading products make its services particularly valuable for middle-market companies and professional financing structures. Fitch’s widespread presence, spread over 28 international locations, is evidence of the agency’s growing familiarity with this evolving sector.

AM Best

AM Best is among the few transnational CRAs that offer services designed exclusively to promote financial stability, solvency, and sustainability in the insurance industry. The highly accredited rating company leverages data-driven insights, market trends, thought leadership, and industry-specific expertise to compile thorough assessments of an insurer’s solvency and stability. What makes AM Best a top-rated credit assessment agency?

• Accurate industry ratings: AM Best offers tailored evaluations of financial health and detailed reports and insights on insurance market trends.
• Comprehensive data analysis tools: It measures insurance-related risk to gauge the capability to settle claims, debts, and other financial obligations.
• Localized support: It provides expert guidance through regional offices in New Jersey, Mexico City, London, Amsterdam, Dubai, Singapore, and Hong Kong.
• Global reach: AM Best is familiar with key insurance-specific markets and regulatory frameworks, enabling the CRA to provide local market insights while maintaining global analytical standards.

The agency has come a long way from its humble beginnings in 1899. It’s grown into the globally recognized rating firm known today with an established network of offices in the U.S., Europe, and beyond. This makes it particularly valuable for insurance companies operating across multiple jurisdictions. The CAR was most recently crowned “Rating Agency of the Year 2024” by Insurance Insider U.S. Honors, asserting its continued leadership in this competitive sector.

Which credit rating agency is the best for your business?

The best rating agency is ultimately the one that:

• Aligns most closely with your business objectives.
• Provides the level of support you require.
• Is easily accessible.

Regular reassessment of your rating agency relationships ensures they continue to serve your evolving business needs effectively.

Can I work with more than one rating agency?

Yes, you can. The benefits of partnering with more than one CRA include broader access to diverse perspectives from different firms on creditworthiness, eliminating bias in risk estimates. Plus, leveraging multiple credit scoring systems may give you a competitive advantage should the lenders apply the most favorable credit score.

Most importantly, a collaboration discourages rating shopping, where competing CRAs turn to unscrupulous “solutions” to land high-value clients, such as overlooking past default flags or inflating credit rates.

This can be observed in 1939. With the Great Depression in its final leg, the Ford Motor Co. was looking forward to successfully adopting what was to be one of America’s budget-friendly luxury cars, the Mercury 8. Unfortunately, World War II began soon after it was launched, and production was suspended. Inevitably, it fell into an economically induced coma and Ford was unable to resuscitate the brand.

Conclusion

The best credit rating agency for your business ultimately depends on your specific needs, industry focus, and strategic objectives. These top-rated credit rating powerhouses excel in their domains.