01
Requested by Issuer
Sign Contract
Credit Rating Procedure
Credit Rating Procedure
How does Credit Rating work?
02
Data collection
Meeting with Management
03
Data Analysis
Draft the credit rating report
04
RC Meeting
Vote on the rating
05
Exit Rating Meeting
Rating Criteria
Rating Criteria
Rating Agency of Cambodia’s rating criteria is forward-looking. Even though we have set in place specific rating criteria and methodology by industry or sector, for the purpose of common knowledge and transparency to various users of information, we have provided a general framework on how we rate corporates and debt instruments.
Business Risks
RAC combines Industry Risks and Company Specific Risks to arrive at Business Risks.
Financial Risks
RAC analyzes the company’s Financial Risks by gauging liquidity and availability of the company’s cash flow.
Default Studies
Default Studies
RAC publishes default statistics, transition rates, and cumulative default rates to help market participants understand rating performance over time.
Default Statistics
Default Statistics is the percentage of default to the total entity ratings calculated in each rating scale for a particular time period. Likewise, the Default Study happens when:
- The issuer/obligor is not able to honor the obligation by paying principal and interest on time.
- The issuer/obligor goes bankrupt.
- The issuer/obligor has encountered another debt restructuring that reduces the creditworthiness.
- The creditor announces an event of default.
Transition Rate
Transition rate is the probability of an issuer/obligor’s rating moving to another rating category which could be upward or downward in the scale for a particular time period. For example, an issuer/obligor with the rating scale of khAAA has been downgraded to khAA.
Cumulative Default Rate
Cumulative Default Rate is the gauge of movement of a rating category into the “Default Rating Category” in a time range.
Explore RAC’s Services & Reports
Learn about our rating services or browse the latest credit ratings and research.