Methodology: transparency and reliability

On this page you will find detailed information about our methods for determining credit ratings. Explore the key features of CIRA's rating methodology and download detailed materials in PDF format.

Methodology for determining credit rating for the corporate non-financial (real) sector of the economy

The credit rating of a company is determined by the probability of default on the company's obligations (Issuer's default probability rating (IDR)). CIRA defines long-term and short-term default probability ratings (LTIDR and STIDR, respectively) on national and internal rating scales

After calculating the IDR and determining the company's credit rating, CIRA conducts a comprehensive analysis of its debt obligations and liabilities that should arise in the future period in order to determine the Recovery Rating (RR) of the borrower's debt obligations and the rating of the company's debt instruments.

The corporate default probability rating is determined by CIRA on six key factors, namely:

Operating environment — analysis of the set of external factors that affect the company's activities.
Sector Profile — analysis of the characteristics, conditions and trends inherent in a certain economic sector or industry; study of factors that have a decisive influence on the company's activity in the sector; characterization of the general state of the sector, growth prospects and the challenges it faces.
Operating profile— characterization of the functioning of the company within the sector and the achievement of the main development goals.
Financial Profile — analysis of key financial indicators and efficiency of financial management.
Connected Companies Influence Rate (CCIR) - analysis of the influence of affiliates/affiliates on financial and operational decisions through joint ownership, transactions between companies and risks of joint management.
External support rate - analysis of the degree of probable support that a company can receive from stakeholders such as the parent company, shareholders (owners) or the state.
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Methodology for determining credit ratings for non-banking institutions of the financial sector

CIRA determines the credit rating of non-banking institutions of the financial sector of the economy using the three main components that make up the aggregated rating of the company. These components include:

Standalone Credit Profile (SCP) — an assessment of the creditworthiness of the company is carried out, based solely on its internal financial condition and ability to meet its debt obligations without taking into account external support.
Shareholder Support Rating (SSR) - analysis of the degree of probable financial support of the company's shareholders through strategic management, financial assistance or other resources.
Government Support Rating (GSR) - the level of probability of support of the company by the government in the event of a threat of default is assessed.
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Methodology for determining credit ratings for banking sector entities

CIRA determines the credit rating for banking sector entities using the three main components that make up the aggregated rating of a bank. These components include:

Solidity Rating (SR) - assessment of the bank's ability to fulfill obligations based solely on its internal financial condition and ability to meet its debt obligations at the expense of internal sources.
Shareholder Support Rating (SSR) - assessment of the level of potential financial support of the bank's shareholders, which can be provided to it (in the form of financial assistance, strategic management or other resources).
Government Support Rating (GSR) - assessment of the level of probability of support of the bank by the government in the event of a threat of default.
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