Risk seems to be everywhere at the moment. Selecting counterparts is a big responsibility and not all borrowers hold a rating from the major credit rating agencies. The decision is critical as the selection of borrowers is at the risk of the beneficial owner as principal. The proposed borrowers are often the unrated subsidiaries of rated parents without formal guarantees.
Innovative agents are already incorporating Credit Benchmark Credit Consensus Ratings in their reporting to provide information on all of the potential borrowers a beneficial owner may select.
The creditworthiness of the borrowers is updated fortnightly and new counterparts such as those active in the growing Peer-to-Peer business can be included.
The Borrower Consensus Report lists some of the borrowers we can provide credit data insights on.
The benefits of this transparency have been to expand the approved borrower lists and to increase the diversity of counterparts based upon credible ‘skin in the game’ credit analysis, using supervised models.