For an investor, having a rating is Quick Indicator, is it worth trusting the issuer. For the issuer, the rating is Reputation marker: independent confirmation of its solvency.

For the exchange, such a transparent risk indicator means more deals. The exchange is interested in having as many instruments as possible traded on it — both stocks and bonds. When issuers have ratings, more investors are willing to buy their securities, which revives trading.

Even more so, themselves jars, as big market players, also rely on ratings. They invest in securities or take them as collateral, focusing on the rating when assessing risks.

In this way, rating agencies play a key role in the structure of interaction between financial market participants. In fact, ratings play the same role for finance as independent audit or legal system: reduce Information uncertainty and risks.

Ukrainian Realities

In Ukrainian realities, the problem lack of a full-fledged rating institutemanifests itself especially acutely. The stock market has been in hibernation for many years: minimum of new public companies, single deals with corporate securities, and total domination of government bonds. One of the main reasons is Lack of trustand infrastructure, in particular Credit Rating Institute.

Secondly, we have unbalanced market structure. We have a very strong competitor for any private debt instruments — state. It borrows hundreds of billions of hryvnias each year through domestic government loan bonds (government bonds), which are considered risk-free. In addition, they are also exempt from taxation for individuals.

Why should an investor take a conditional corporate bond with a yield of 15% and a lot of risks, if you can safely take a government bond at 12% — and without excessive headache? As a result, a whole small layer of private investors Concentrated on EIAAnd it's hard for businesses to compete for that money — even if they wanted to issue their bonds.

It is impossible not to mention and regulation factor. Only recently has Ukraine begun to bring order in this area. In September 2024, the Verkhovna Rada adopted Law of Ukraine “On Rating”aimed at improving the efficiency of the rating agencies and implementation European standards of their activities. This document harmonizes Ukrainian rules with EU Regulation No. 1060/2009 — the basic act of the European Union in this area.

In simple words, the goal is ensure the independence, quality and transparency of credit ratingsto prevent conflicts of interest and integrate Ukraine into the global rating system. Prior to that, the legislation was fragmentary: several local agencies operated under the license of the NCCCFR, but There was no real weight for investors.. Now there is a chance that regulatory oversight will increase, standards will rise, and trust will gradually recover.

Importance of rating agencies in Ukraine

The consequences of the current situation are already well felt. Corporate sector critically dependent on bank lendingThis limits its financial flexibility. At the same time Ukrainian pension funds, insurance companies and interested citizens have no real alternative to investing: The stock market is dead, and the corporate bond market essentially does not exist. All this inhibits developmentand leads to the fact that capital in Ukraine does not work for the economy, and simply stored in the government register.

The rating law is a good start, but by itself it will not change anything. It is necessary for investors to see: even Ukrainian rating correlates with reality. That a company with an “A” rating faithfully fulfills its obligations, and the one with a “SSC” is really problematic.

That's why development of an independent rating systemThis is a prerequisite for restoration and development of the stock market of Ukraine. Without ratings it is impossible to create A complete alternative to bank financing, and therefore, and Healthy competition for investors. Today banks remain almost the only channel for raising capitalfor a business that creates distortions, limits choice, and sometimes — hampers the development of the banks themselveswho have no incentive to change their terms or become more customer-oriented.

The stock market, unlike banks, enables attract a lot of money without collateral and without “manual” approval of credit decisions. But for this market to work, it must be clear, transparent and predictable. And that's it The rating agency is one of the key elements that makes this possible. Without it, the market will remain fragmented and distrust the dominant factor

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