The purpose of our Financial Health Rating (FHR®) is to understand changes in risk in a systematic, transparent and data-driven method. For this reason, our FHR should be viewed as complementary to traditional agency ratings, rather than directly comparable.
We strongly believe that you should incorporate various, uncorrelated tools that are that offer different perspectives if you are trying to build an effective risk management program. Specifically, our FHR can add a unique and telling perspective to your analysis, as it is fundamentally different from traditional agency ratings in a number of important ways.
- We employ an entirely objective, model-driven approach to understanding financial health
- We do not emphasize ratings stability. Instead, we adjust our ratings continually as the underlying fundamental data changes for companies
- Our FHRs apply to public and private companies anywhere around the world with exactly the same methodology. Our FHRs are always comparable on an “apples to apples” basis
While we do discourage absolute comparisons, we have nonetheless provided a table below, showing an approximate mapping between the FHR and equivalents from S&P, Moody’s & Fitch. EPD = Estimated Probability of Default.
This table shows the equivalents in the rating levels for the corporate ratings scale of RapidRatings, Standard and Poor's and Moody's. While we are confident that there is a reasonable degree of accuracy across the rating levels that we have aligned, the approach is not scientific and it could be argued that there are other similar or proximate alignments that might also be acceptable. The credit rating equivalents table is not intended to imply that there is any correlation between the rating system and methodology of RapidRatings and the rating systems and methodologies of Standard & Poor's or Moody's Investors Services, or that any other rating agencies would rate a company at the same level as RapidRatings. * S&P, Moody's and Fitch are trademarks of their respective companies.