Databases offering Debt/credit ratings

The Vrije Universiteit gives access to several databases offering data on Debt ratings.
Note:
SDC and Datastream only offer the latest ratings. No historic data.
Compustat only North America.
The following pages provide lots of (secondary) information on how the database generally works.

Bankscope (OECD countries)
Bankscope is a Bureau van Dijk database. All these database work through the same kind of itnerface, so when you master one database, you can operate another Bureau van Dijk database (e.e. Amadeus, Reach, Bankscope etc.)

http://finabase.blogspot.nl/search/label/Amadeus
As for credit ratings in Bankscope:
Best is first to create a selection of banks, and once you're done to create the list of selected banks. next you "add" more data to your workset using the ADD link (top right of the list)
Bankscope only provides Fitch ratings.
But, compared to other databases, it does provide historic ratings.
It has to be said that the license does unfortunately not permit the download of these ratings.
The only solution is to screen cap the ratings and insert them in your worket manually.


Compustat (North America, Ratings section)
SPSDRM -- S&P Subordinated Debt Rating
This item represents the issuer subordinated debt rating that has been assigned to a company by Standard & Poor's. (prior to 1.09.1998)
SPLTICRM -- S&P Domestic Long Term Issuer Credit Rating
The Standard & Poor's Issuer Credit Rating (ICR) is a current opinion of an issuer's overall creditworthiness, apart from its ability to repay individual obligations
SPSTICRM -- S&P Domestic Short Term Issuer Credit Rating
The Standard & Poor's Issuer Credit Rating (ICR) is a current opinion of an issuer's overall creditworthiness
SPCSRC -- S&P Quality Ranking - Current
This item is an appraisal of past performance of a stock's earnings and dividends and the stock's relative standing as of a company's current fiscal year-end.

Datastream:
Only Bonds and Convertibles, the latest rating of Moody's and of S&P.
ISPRT- Current rating of a bond from S&P
MRT- Moody’s rating for Bond
BSPF- S&P Current Foreign Credit Rating (Borrower Rating)
BSPL- S&P Current Local Credit Rating (Borrower Rating)
BSPHF - Historic rating

Other datatypes



SDC Mergers and Acquisitions

Executed result
What to do: (example)

Criteria: date announced 2005 - 2008; target nation Netherlands, related debt ratings (search in all by typing).
After adding your criteria, go to top bar select dropdown menu reports and select CUSTOM report. A menu pops up where your own criteria can be added. Go to the All TAB and type in: debt rating.
Add those:


The output result is:



Note: Searches can result in large work sets, so it could be a good idea to 'cut up' yourt search into parts and add several extra limiters.

Important NB on content (31st March 2011): I have noticed that SDC 3.0 does not provide credit ratings in M&A.
SDC (link: explains how to do a basic tear sheet search)

SDC GNI (Global New Issues)

(Issued new stocks. Ratings may influence buyers in buying new stock)


Report Output with ratings: (use Report button in the Top Bar)



Stock ranking, credit/debt rating

Stock rating, debt rating and stock ranking

Definition Stock ratingAn evaluation of a stock's expected performance and/or its risk level as judged by a rating agency such as Standard and Poor's. A stock rating will usually tell the investor how well a stock's market value relates to what analysts believe is a fair value for the stock, based on an objective evaluation of the company. The greater the amount by which the fair value exceeds the market value, the more highly recommended a buy the stock is. Conversely, if the market value of the stock exceeds the fair value of the stock, then analysts recommend that the stock be sold. Most stock rating systems give stocks one to five stars, with five being best. While some investors use a particular analyst's stock ratings as guidance, it is important to evaluate the criteria which they use to determine fair value, since the techniques they use are diverse and not all analysts are equally competent.

You could also interpret the rating as a ranking system in which the highest ranking means very credit worthy.

Debt rating
In investment, the bond credit rating assesses the credit worthiness of a corporation's debt issues. It is analogous to credit ratings for individuals and countries. The credit rating is a financial indicator to potential investors of debt securities such as bonds.
These are assigned by credit rating agencies such as Moody's, Standard & Poor's, and Fitch to have letter designations (such as AAA, B, CC) which represent the quality of a bond. Bond ratings below BBB/Baa are called junk bonds

Credit rating agencies
In short: credit rating agencies (CRAs) are companies specializing in investigating credit worthiness (abilty to pay back their loans) of companies and governments. In general concerning certain types of debt obligations like bonds and the debt instruments themselves. Practice is that companies use credit ratings to investigate whether investing in that company would be a good idea or not. But the last couple of years CRAs are primarily known for their ratings of governments and nations, think of Ireland, Greece, Italy and Spain.


In most cases, the issuers of securities are companies, special purpose entities, state and local governments, non-profit organizations, or national governments issuing debt-like securities (i.e., bonds) that can be traded on a secondary market.
Many people are unaware of what the actual debt ratings mean. The Moody's rating is based on statistical calculations of a company's likelihood of default. Most explanations give verbal descriptions for the ratings, such as Aaa = "Highest Rating Available" or Ba = "Low Grade", the first level of "Below Investment Grade" or the first level of "Junk Bonds". These descriptions seem useless without a way to determine what it all means in terms of the likelihood of default on the terms of repayment. To me, what is important is the chance that the company is not going to live up to its obligations, and that means the percentage of companies that default with a given rating. Moody's calculates this information, but it is hard to find a place that shows it.

Ratings by Moody's, Standard and Poors and Fitch


Rating examples:
(highest)

(lowest)

(source wikipedia)

Criticism on the rating system
Untill the 1970 the ratings were done entirely indepentdantly. But in the early 1970s, (S&P, Moody's, and Fitch) began to receive payment for their work by the securities issuers for whom they issue those ratings. Obviously the question arose on the impartiality of the three. One can image that securities issuing companies have an interest in good ratings, and the intention of companies shopping for good ratings, until they get one may be clear. In fact, it is not imaginative that getting ratings this way may have been one of the causes for the credit crunch, given the high ratings CDOs (collateralized debt obligations) and MBSs (mortgage backed securities) got. (High rating: buy, buy buy!)

Interview with John Kiff , Senior Financial Sector Expert Global Financial Stability Division in the Monetary and Capital Markets Department (IMF) on the debt/credit rating system. (Global Financial Stability Report)http://www.imf.org/external/mmedia/view.aspx?vid=619701770001



Sites:
Definition Wikipedia

Standard & Poors
Moody's

See also Databases offering debt/ credit ratings (hyperlink)
IMF Direct Blog (John Kiff)  http://blog-imfdirect.imf.org/
. End the credit rating addiction < blog item