Rating agencies assess the creditworthiness of debt issuers from "summary" of Financial Markets and Institutions, Global Edition by Frederic S. Mishkin,Stanley G. Eakins
Rating agencies play a crucial role in the financial markets by evaluating the creditworthiness of debt issuers. This assessment is essential for investors to make informed decisions about where to allocate their funds. When investors are considering purchasing bonds or other debt securities, they rely on the ratings provided by these agencies to gauge the risk associated with the investment. The creditworthiness of a debt issuer is a reflection of its ability to meet its financial obligations in a timely manner. Rating agencies use a variety of factors to determine the creditworthiness of an issuer, including its financial health, business operations, and market conditions. By analyzing these factors, rating agencies assign a rating to the issuer, which serves as an indicator of the issuer's likelihood of defaulting on its d...
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