Editorial & Advertiser disclosure

Global Banking and Finance Review is an online platform offering news, analysis, and opinion on the latest trends, developments, and innovations in the banking and finance industry worldwide. The platform covers a diverse range of topics, including banking, insurance, investment, wealth management, fintech, and regulatory issues. The website publishes news, press releases, opinion and advertorials on various financial organizations, products and services which are commissioned from various Companies, Organizations, PR agencies, Bloggers etc. These commissioned articles are commercial in nature. This is not to be considered as financial advice and should be considered only for information purposes. It does not reflect the views or opinion of our website and is not to be considered an endorsement or a recommendation. We cannot guarantee the accuracy or applicability of any information provided with respect to your individual or personal circumstances. Please seek Professional advice from a qualified professional before making any financial decisions. We link to various third-party websites, affiliate sales networks, and to our advertising partners websites. When you view or click on certain links available on our articles, our partners may compensate us for displaying the content to you or make a purchase or fill a form. This will not incur any additional charges to you. To make things simpler for you to identity or distinguish advertised or sponsored articles or links, you may consider all articles or links hosted on our site as a commercial article placement. We will not be responsible for any loss you may suffer as a result of any omission or inaccuracy on the website.

Business

Posted By Jessica Weisman-Pitts

Posted on January 23, 2025

Best Credit Rating Agency for Business Owners

Bonds have long been part of the country’s financial systems. Consumers investing in these debt securities must understand their creditworthiness. How does KBRA contribute? As an independent evaluator, it offers insight into bonds and who issues them. Here’s an overview of KBRA.

What Is KBRA?

KBRA was founded in 2010 to restore confidence in the credit rating system. Prior to its founding, the company became an official nationally recognized statistical rating organization (NRSRO) in 2008 through the Securities and Exchange Commission (SEC). KBRA’s rating system set itself apart from other organizations as the world recovered from a financial crisis.

KBRA credit rating protocol is renowned for its in-depth research and timely delivery. The company’s experts evaluate each bond issuer and its risk of default.

Through increased transparency and accuracy, clients have more information before making decisions. Besides its NRSRO accreditation, KBRA is also a credit rating provider (CRP) for the National Association of Insurance Commissioners.

What Credit Services Does KBRA Offer?

KBRA’s primary function is credit services. With this objective, investors have more knowledge when researching debt securities. Here are the agency’s offerings.

1. Credit Ratings

Credit ratings are KBRA’s specialty, as they determine the bond issuer’s risk of default. Each grade may start with a preliminary rating phase based on records and various assumptions. Once there is more information, the company uses the Insurer Financial Strength Rating (IFSR) scale and the long- and short-term outlook for credit ratings.

Another service from KBRA is an unpublished credit rating. With this system, the organization keeps the credit rating unpublished, confidential and surveilled. Therefore, outsiders won’t know the rating's identity. Like the published rating, this grade depends on preliminary information and assumptions. A company may request an unpublished rating if it requires internal due diligence or transaction needs.

2. Credit Assessment

KBRA also performs credit assessments. In this evaluation, experts analyze the creditworthiness of an unrated issuer. Alternatively, they may assess a confidential obligation that has not been published. These requests are most common from third parties providing limited information for the evaluation. It’s essential to know these assessments are not the same as credit ratings.

3. Fund Rating

Aside from credit ratings, KBRA also evaluates funds. These opinions analyze the underlying portfolio of an investment fund, which could include mutual funds or exchange-traded funds (ETFs). When investigating the portfolio, experts also scrutinize the management team’s investment strategy to understand the fund's viability. While the opinion provides professional knowledge, it doesn’t indicate performance regarding yield and returns.

4. Indicative Rating

Indicative ratings from KBRA are helpful because they analyze hypothetical scenarios. Companies may use them if they want a point-in-time assessment that won’t have surveillance. Like unpublished credit ratings, these analyses remain private. Indicative ratings are for entities, issuers or issuer obligations that are unpublished and confidential. A company may consider this when contemplating a debt issuance.

What Is KBRA’s Bond Rating System?

KBRA establishes credit ratings for bond issuers and investors to determine their trustworthiness. With each score, the bond rating agency assesses the likelihood of a default and the severity of the losses. Here’s what the company’s bond rating system looks like.

A

An A rating is the highest an issuer or an investor can receive. With a AAA mark, KBRA has determined the entity has almost no risk regarding credit events. The company sparingly awards the rating, thus reserving it only for the most deserving organizations. One example is the State of Ohio General Obligation Highway Capital Improvement Bonds, which earned a AAA rating in 2024.

The next tiers are AA and A, offering some risk due to credit events. With an AA rating, KBRA expects the issuer or investor to maintain high quality and have a minimal risk of loss due to credit events. An A rating means there is a small amount of liability, though the entity should endure difficult times. BNP Paribas recently earned this determination from the credit rating agency.

B

A BBB rating means KBRA has determined the issuer is of medium quality. Investors should be cautious about acquiring these debt securities, as there is some risk of loss when credit events occur. The company may present losses in economically stressful times due to external and internal factors. Recently, KBRA credit experts assigned a BBB rating to the Newmark Group, a New York-based real estate business.

KBRA’s BB rating or lower occurs when issuers reach lower qualities. The risk of loss becomes moderate with a BB-rated bond. Issuers and obligations have specific vulnerabilities that create a moderate credit risk. When dealing with B-rated credit, the rating scale says the entity is of very low quality and has a high risk of loss. A significant credit risk is associated with these issuers due to shortcomings.

C

The C ratings involve speculative-grade bonds that are significantly less likely to meet debt obligations. Atop these ratings is CCC, which includes a substantial risk of loss near or during default. While the risk is high, KBRA has high recovery expectations. It recently updated its rating actions on securitization trusts by lowering Class C note ratings to CCC (sf).

With CC ratings, KBRA has determined the issuer is already in or is near default with an average recovery forecast. This lower rating still includes the significant risk of loss due to credit events, but the long-term outlook is worse. A C-grade is the second-worst bond rating, including debt securities with low recovery expectations. This means a high risk of default exists and is likely in the future.

D

A D-rating from KBRA means a default has occurred. This bond grade means the issuer can no longer fulfill debt obligations. The company’s default definition involves missed interest, principal or preferred dividend payments. When this credit-related event occurs, it’s unlikely that the obligation will be recovered. Then, the business will take further steps to comply with regulations.

If a bond issuer defaults, it typically files for bankruptcy protection from creditors. Alternatively, it may take other steps to protect its assets. Another default possibility is the bond issuer being placed into receivership. In this situation, a court-appointed receiver controls the assets to recover funds or protect them from bankruptcy. KBRA also considers default when regulators have closed the bond issuer.

What Products Does KBRA Offer?

Besides bond and credit ratings, KBRA provides various products for its clients. Here are the company’s offerings.

1. KBRA Analytics

KBRA Analytics is the company’s platform for data and advanced analytics. This suite of data-centric applications enables the global financial community to take advantage of modern technologies. Worldwide professional teams and industry specialists provide insight and a solid foundation for further analysis. KBRA Analytics features several services, including credit profiling, direct lending deals and financial intelligence.

2. KBRA Credit Profile

Credit profiling is among the most popular services KBRA offers. This function gives clients a new credit perspective and monthly surveillance for enhanced knowledge. Each report indicates how the credit rating agency arrived at its valuations and loss forecasts. These scenarios prepare clients for various future situations, whether positive or negative. KBRA’s research ensures meticulous preparation to show regional and macro trends in commercial real estate.

KBRA’s credit profile offers alerts when critical developments have affected CMBS collateral. This actionable intelligence helps clients respond to market transactions, performance trends and fundamental movements in submarkets. Subscribers can also access special reports that detail borrower behavior, natural disaster exposure and other critical news. The exclusive information also includes an index report to detail credit outlook trends.

3. KBRA Direct Lending Deals

KBRA clients get exclusive news on private credit with direct lending deals. Originators and investors see the latest updates on the $1 trillion opaque market and subsequent lower and middle markets. KBRA direct lending deals build on industry relationships, thus offering first-class analysis on structures and fundraising. Investors and originators also better understand business development companies (BDCs).

KBRA’s direct lending deals have expanded their scope by reporting on the private European market. This service allows originators and investors to see monthly and quarterly reports to understand volume, structure, terms and other critical facets. News on direct lending deals is crucial for company leaders who seek over $1 billion in private loans and other businesses in the middle-market spectrum.

4. KBRA Financial Intelligence

KBRA Financial Intelligence covers the North American financial sector and data from various banks. This knowledge enables specialist investors, advisers and other industry professionals to fulfill their needs better and be more selective with data. Leveraging financial intelligence gives clients access to the data warehouse covering America’s financial institutions. Additionally, they get a data feed and an Excel add-in for banks, insurance and real estate companies.

KBRA’s data coverage is comprehensive, as it contains regulatory data across the U.S. banking system. Clients gain knowledge about holding companies, credit unions and commercial banks from the database. The financial intelligence scores covering thousands of institutions nationwide are among the top features. KBRA publishes unbiased and independent analyses for each company.

Consider KBRA

KBRA has offered financial and risk advisory services to clients since 2010. Bond ratings are among their most critical functions, advising originators and investors on the risk of loss and obligations. In addition to bond ratings, the company also specializes in financial intelligence, credit profiling and direct lending deals. Its focus on transparency, integrity and innovation makes it a top choice for investors.


What Is KBRA?

KBRA was founded in 2010 to restore confidence in the credit rating system. Prior to its founding, the company became an official nationally recognized statistical rating organization (NRSRO) in 2008 through the Securities and Exchange Commission (SEC). KBRA’s rating system set itself apart from other organizations as the world recovered from a financial crisis.

KBRA credit rating protocol is renowned for its in-depth research and timely delivery. The company’s experts evaluate each bond issuer and its risk of default.

Through increased transparency and accuracy, clients have more information before making decisions. Besides its NRSRO accreditation, KBRA is also a credit rating provider (CRP) for the National Association of Insurance Commissioners.

What Credit Services Does KBRA Offer?

KBRA’s primary function is credit services. With this objective, investors have more knowledge when researching debt securities. Here are the agency’s offerings.

1. Credit Ratings

Credit ratings are KBRA’s specialty, as they determine the bond issuer’s risk of default. Each grade may start with a preliminary rating phase based on records and various assumptions. Once there is more information, the company uses the Insurer Financial Strength Rating (IFSR) scale and the long- and short-term outlook for credit ratings.

Another service from KBRA is an unpublished credit rating. With this system, the organization keeps the credit rating unpublished, confidential and surveilled. Therefore, outsiders won’t know the rating's identity. Like the published rating, this grade depends on preliminary information and assumptions. A company may request an unpublished rating if it requires internal due diligence or transaction needs.


2. Credit Assessment

KBRA also performs credit assessments. In this evaluation, experts analyze the creditworthiness of an unrated issuer. Alternatively, they may assess a confidential obligation that has not been published. These requests are most common from third parties providing limited information for the evaluation. It’s essential to know these assessments are not the same as credit ratings.

3. Fund Rating

Aside from credit ratings, KBRA also evaluates funds. These opinions analyze the underlying portfolio of an investment fund, which could include mutual funds or exchange-traded funds (ETFs). When investigating the portfolio, experts also scrutinize the management team’s investment strategy to understand the fund's viability. While the opinion provides professional knowledge, it doesn’t indicate performance regarding yield and returns.

4. Indicative Rating

Indicative ratings from KBRA are helpful because they analyze hypothetical scenarios. Companies may use them if they want a point-in-time assessment that won’t have surveillance. Like unpublished credit ratings, these analyses remain private. Indicative ratings are for entities, issuers or issuer obligations that are unpublished and confidential. A company may consider this when contemplating a debt issuance.

What Is KBRA’s Bond Rating System?

KBRA establishes credit ratings for bond issuers and investors to determine their trustworthiness. With each score, the bond rating agency assesses the likelihood of a default and the severity of the losses. Here’s what the company’s bond rating system looks like.

A

An A rating is the highest an issuer or an investor can receive. With a AAA mark, KBRA has determined the entity has almost no risk regarding credit events. The company sparingly awards the rating, thus reserving it only for the most deserving organizations. One example is the State of Ohio General Obligation Highway Capital Improvement Bonds, which earned a AAA rating in 2024.

The next tiers are AA and A, offering some risk due to credit events. With an AA rating, KBRA expects the issuer or investor to maintain high quality and have a minimal risk of loss due to credit events. An A rating means there is a small amount of liability, though the entity should endure difficult times. BNP Paribas recently earned this determination from the credit rating agency.

B

A BBB rating means KBRA has determined the issuer is of medium quality. Investors should be cautious about acquiring these debt securities, as there is some risk of loss when credit events occur. The company may present losses in economically stressful times due to external and internal factors. Recently, KBRA credit experts assigned a BBB rating to the Newmark Group, a New York-based real estate business.

KBRA’s BB rating or lower occurs when issuers reach lower qualities. The risk of loss becomes moderate with a BB-rated bond. Issuers and obligations have specific vulnerabilities that create a moderate credit risk. When dealing with B-rated credit, the rating scale says the entity is of very low quality and has a high risk of loss. A significant credit risk is associated with these issuers due to shortcomings.

C

The C ratings involve speculative-grade bonds that are significantly less likely to meet debt obligations. Atop these ratings is CCC, which includes a substantial risk of loss near or during default. While the risk is high, KBRA has high recovery expectations. It recently updated its rating actions on securitization trusts by lowering Class C note ratings to CCC (sf).

With CC ratings, KBRA has determined the issuer is already in or is near default with an average recovery forecast. This lower rating still includes the significant risk of loss due to credit events, but the long-term outlook is worse. A C-grade is the second-worst bond rating, including debt securities with low recovery expectations. This means a high risk of default exists and is likely in the future.

D

A D-rating from KBRA means a default has occurred. This bond grade means the issuer can no longer fulfill debt obligations. The company’s default definition involves missed interest, principal or preferred dividend payments. When this credit-related event occurs, it’s unlikely that the obligation will be recovered. Then, the business will take further steps to comply with regulations.

If a bond issuer defaults, it typically files for bankruptcy protection from creditors. Alternatively, it may take other steps to protect its assets. Another default possibility is the bond issuer being placed into receivership. In this situation, a court-appointed receiver controls the assets to recover funds or protect them from bankruptcy. KBRA also considers default when regulators have closed the bond issuer.

What Products Does KBRA Offer?

Besides bond and credit ratings, KBRA provides various products for its clients. Here are the company’s offerings.

1. KBRA Analytics

KBRA Analytics is the company’s platform for data and advanced analytics. This suite of data-centric applications enables the global financial community to take advantage of modern technologies. Worldwide professional teams and industry specialists provide insight and a solid foundation for further analysis. KBRA Analytics features several services, including credit profiling, direct lending deals and financial intelligence.

2. KBRA Credit Profile

Credit profiling is among the most popular services KBRA offers. This function gives clients a new credit perspective and monthly surveillance for enhanced knowledge. Each report indicates how the credit rating agency arrived at its valuations and loss forecasts. These scenarios prepare clients for various future situations, whether positive or negative. KBRA’s research ensures meticulous preparation to show regional and macro trends in commercial real estate.

KBRA’s credit profile offers alerts when critical developments have affected CMBS collateral. This actionable intelligence helps clients respond to market transactions, performance trends and fundamental movements in submarkets. Subscribers can also access special reports that detail borrower behavior, natural disaster exposure and other critical news. The exclusive information also includes an index report to detail credit outlook trends.

3. KBRA Direct Lending Deals

KBRA clients get exclusive news on private credit with direct lending deals. Originators and investors see the latest updates on the $1 trillion opaque market and subsequent lower and middle markets. KBRA direct lending deals build on industry relationships, thus offering first-class analysis on structures and fundraising. Investors and originators also better understand business development companies (BDCs).

KBRA’s direct lending deals have expanded their scope by reporting on the private European market. This service allows originators and investors to see monthly and quarterly reports to understand volume, structure, terms and other critical facets. News on direct lending deals is crucial for company leaders who seek over $1 billion in private loans and other businesses in the middle-market spectrum.

4. KBRA Financial Intelligence

KBRA Financial Intelligence covers the North American financial sector and data from various banks. This knowledge enables specialist investors, advisers and other industry professionals to fulfill their needs better and be more selective with data. Leveraging financial intelligence gives clients access to the data warehouse covering America’s financial institutions. Additionally, they get a data feed and an Excel add-in for banks, insurance and real estate companies.

KBRA’s data coverage is comprehensive, as it contains regulatory data across the U.S. banking system. Clients gain knowledge about holding companies, credit unions and commercial banks from the database. The financial intelligence scores covering thousands of institutions nationwide are among the top features. KBRA publishes unbiased and independent analyses for each company.

Consider KBRA

KBRA has offered financial and risk advisory services to clients since 2010. Bond ratings are among their most critical functions, advising originators and investors on the risk of loss and obligations. In addition to bond ratings, the company also specializes in financial intelligence, credit profiling and direct lending deals. Its focus on transparency, integrity and innovation makes it a top choice for investors.




Recommended for you

  • 2025 Corporate Governance Awards

  • Baden Bower Explores Martal Group Extended Offer for B2B Sales Growth

  • The Ransomware Standoff: Why Almost Half of Businesses Refuse Pay Up