How Investment Grade Credit Ratings Can Benefit ASSA ABLOY
An investment grade credit rating is a high rating given to a company by a credit rating agency. This type of rating indicates that a company is less likely to default than other types of investments. It can be a valuable asset to an investor, as it allows them to compare different investment alternatives. ASSA ABLOY is one of the companies that regularly seeks investment grade credit ratings. Read on to learn more about investment grade ratings and how they can benefit your business.
Investment grade bonds have a credit rating of BBB or higher. These bonds have a low risk of default and are rated by agencies as “investment grade.” They also offer attractive yields compared to stocks. Unlike stocks, bonds do not fluctuate in value like stocks do. During a bankruptcy, bondholders are paid out first, rather than stockholders. Therefore, an investment grade bond can be a great choice for conservative investors.
Egan-Jones uses its Corporate methodology to assign an investment grade credit rating to certain loans. For example, an electro-mechanical company sought a credit rating for loans to finance aircraft acquisitions. In this case, Egan-Jones rated the assets of the airline as collateral. After assessing the quality of the assets, cashflow, and coverage, Egan-Jones assigned an investment grade credit rating to the senior secured notes.
Downgraded countries tend to have higher borrowing costs. They also have lower confidence in their public finances. The lower their investment grade rating, the more expensive they will have to borrow. The downgrades can also cause a large outflow of funds from the equity markets. In addition, the bonds of a country that has lost its investment grade credit rating are sold in the market. As a result, they will face higher borrowing costs and fewer lenders.
In addition to S&P Global Ratings, Moody’s Investors Service assigned Santos a Baa3 credit rating with a stable outlook. The new rating reflects the company’s increased exposure to low-cost LNG production. The credit rating reflects the size and scale of the company. The credit rating has been boosted by Santos’ acquisition of Oil Search. It has since received stable ratings from Fitch and S&P Global Ratings.
A positive investment grade credit rating helps a company maintain a competitive edge. While there are always risks associated with investing in debt, MCE has demonstrated that it has a strong balance sheet and a positive cash-on-hand position. A positive credit rating gives customers peace of mind that their company will be around to deliver on its promises. With a BBB+ rating, MCE can be confident in continuing to provide its customers with competitive clean energy services.
