Improving new investment finance
options in the Western Balkans Importance of credit information sharing
8 June 2010
Skopje, Macedonia
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Goal
Help financial institutions, investors, partners,
suppliers and clients by providing a tool that
couples a possibly unknown borrower or
issuer with informative and meaningful data
about creditworthiness
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Disclosure of assessed
creditworthiness - benefits
Enables easier access and improves the terms of financing from
financial institutions
Enables the use of more favorable credit conditions regarding the
BASEL II implementation in Bulgaria
Enables more financing sources - corporate bond issues
Supports the improvement of trade relations with various
contractors incl. cases with granted commodity credits
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Eases the process of participation under technical and financial support
programs
Expands the opportunities for attracting strategic investors
A tool for improving the operational efficiency and financial performance
of the company
A strong engagement on behalf of the management towards active
governance and maintenance of high quality of the offered
products/services
Supports the company’s image
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Service providers
International CRA
Financial institutions
Local credit rating institutions have better local environment knowledge;
reliable and profound analysis;
independence of credit assessment;
rates conformable to local clients budgets ;
faster reaction to changes;
no limitation on the ratings level ;
lack of conflict of interest ;
publicity, contacts.
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Legal framework
2005/68/EC
2006/48/EC, 2006/49/EC
2009/1060/EC
BNB
Financial Supervision Commission
National Statistical Institute
National Revenue Agency
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Deficiency and weakness of
reliable information
Individual data – NSI, NRA Companies are obliged to publish financial statements
Anonymous data only for scientific purpose
Aggregated data Lack of info in low level of aggregation of industries
Less than three, dominated 85% by a single company, secondary confidentiality
The disclosed information is highly aggregated
Delay of available info Approximately 1.5 years, quarterly limited info
No access to the NSI register Could be provided limited info-main activity, address, contact person, size of
the company, etc..
No access to tax info VAT monthly, tax yearly, social security monthly, etc..
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Services provided
Credit rating
Credit report
Credit limit online
Ancillary services
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Credit rating - assessed risk
factors Sources of business risk
Industry risk
Market position
Operational efficiency
External factors
Management quality Sources of financial risk
Financial performance
Financial flexibility
Peer group analysis
Financial forecast
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Credit report, credit limit online -
assessed risk factors
Sources of business risk
Market position
Sources of financial risk
Financial performance
- Profitability
- Leverage
- Liquidity
- Efficiency
Assessment of credit limit is
based on:
Cash flow and working capital
analysis;
Position of the target company in the
Industry in which operates - selected
financial indicators;
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Ancillary services
Market analysis
Risk analysis and assessment
Score cards – SME
Score cards – physical persons
Basel II – database
Basel II – probability of default
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Bulgarian Credit Rating Agency
June 2002 - foundation of the agency;
April 2003 – BCRA officially starts its business;
July 2003 - the agency signs a contract with BCCI (Bulgarian Chamber of Commerce and Industry);
June 2004 - the agency signs an agreement for technical cooperation with “ICRA” Ltd. (an Associated Moody’s Investors Service);
Feb 2006 – BCRA becomes a member of Bulgarian Economic Forum;
May 2006 – Financial Supervisory Commission, included BCRA in its recognition list along with Moody’s Investors Service, Standard & Poor’s, Fitch Ratings and AM Best Company;
July 2008 – Financial Supervision Commission joined BCRA in the list of the rating agencies along with Moody’s Investors, Standard & Poors and Fitch which can assign ratings of banks.
November 2008 – Hypo Investment AG chose BCRA АD for agency which assigns credit rating to issuers of bonds.
March 2009 – Contract concluded with Norwegian Embassy for analysis and assessment of the Bulgarian companies` creditworthiness.
May 2010 - BCRA local leader
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Bulgarian Credit Rating Agency
Thank you for your attention!
Sofia tel.: +359 2 987 63 63
Blvd. “Evlogi Georgiev” №95 www.bcra-bg.com