Expertise & Independence
Due to their impact on funding costs, internal and external credit ratings are a key element for the pricing of credit products. They also determine the overall profitability of a banking relationship.
It is difficult for treasurers to evaluate how banks view companies on the bank’s internal credit ratings scale.
Only a thorough and independent evaluation will yield a precise result and numerous parameters need to be taken into account.
Redbridge’s Debt Advisory team provides access to an exclusive bank credit scoring methodology. In addition, Redbridge has developed a proprietary risk-based model (RAROC) to analyze fees paid by its clients to their banking partners and to determine each lender’s expected level of return.
From a CFO perspective, having a clear view on internal credit ratings is key to holding appropriate dialogs with the lenders and, ultimately, to negotiating optimal terms and conditions.