  |
|
Capture The Moment: FirstKnow.It
|
|
|
 |
Credit Ratings, Probability of Default and Capital at Risk for 9,000 companies and banks listed on the US, Canadian, UK, French, German, Japanese and Indian stock markets:
All data re-evaluated every single working day.
How? Visit our credit ratings methodology page
to find out.
Visit our credit rating coverage page to see if your clients are covered.
|
| |
FirstKnow.It implements a credit model based on
stock prices based on the Black-Cox approach to credit evaluation. In this,
default occurs where the market value of the assets of a company decline to the
level of the company's liabilities - the default barrier. At this point a "loss
given default" is incurred due to bankruptcy costs in liquidating the company.
The approach is characterized as exercise of a put option - in defaulting, the
company "puts" its assets on its creditors in settlement of its liabilities.
Market prices enable the put option to be valued, and default risk measures to
be produced.
The essence of this approach can be captured in the simple insight that
creditors should be concerned about a company whose share price is sliding
towards zero because the company may be about to become insolvent.
Stock-markets are fairly efficient in valuing securities and know early-on
about impending problems and typically mark down its shares weeks before credit
analysts change their ratings.
This type of quantitative approach has received increasing support from
international financial regulatory agencies, particularly with the advent of
Basel II. Recent studies by the Bank of England, the Deutsche Bundesbank and
the European Central Bank have all concluded that credit systems based on
equity prices provide more powerful predictors of default than traditional
approaches.
FirstKnow.It produces credit ratings, probabilities of default and expected loss from current and historic share prices for US, Canadian, UK, French, German, Japanese and Indian companies and banks. Additionally, our model calculates an "Equity Equivalent Position" which is an exposure in the listed equity of companies which is risk-equivalent to a credit exposure. This is often called the "Delta" and enables credit positions to be hedged using short equity positions.
FirstKnow.It's online database is updated every night to bring you updated
ratings incorporating the latest market perspectives on every company to a
watchlist you can define on our system.
Historical trends provide enhanced insights into the credit situation.
FirstKnow.It's advanced charting tool enables trends to be reviewed at a
glance.
FirstKnow.It is an indispensable tool for Financial Institutions, Finance
Directors, Corporate Treasurers and Credit Controllers.
Capture The Moment: FirstKnow.It
For subscription information, please email us at
Info@FirstKnow.It
Join our mailing list to
receive updates on new features of our service.
Splash photos by Prof. Andrew Davidhazy,
School of Photographic Arts and Sciences,
Rochester Institute of Technology USA. Reproduced with permission
|
|
 |
|