The Moody’s Analytics system is a widely recognized analytical system used by the financial industry to assess the creditworthiness of companies, governments, and other entities. The system provides investors with an independent assessment of the credit risk associated with various debt securities.
About Moody’s
The Moody’s Analytics system is a widely recognized credit analytical system used by the financial industry to assess the creditworthiness of companies, governments, and other entities. The system provides investors with an independent assessment of the credit risk associated with various debt securities.
Moody’s Independence and Integrity
Moody’s reputation for independence and integrity has earned the trust of capital market participants across the globe. Their ratings and analysis encompass a wide range of debt instruments, including:
- Over 100 sovereign nations
- Around 12,000 company issuers
- Approximately 29,000 public finance issuers
- Over 96,000 structured finance obligations
Moody’s Assessment on the Estateguru Platform
Estateguru will submit its new loan projects to Moody’s to be assessed according to the Commercial Mortgage Metrics (CMM) model. The assessment takes into consideration the location, value, cash flow and type of the collateral, loan terms (maturity, interest rate etc) and other credit inputs. This credit risk score will then be displayed alongside the project on the Estateguru platform.
The CMM model is considered the leading analytical tool and factors in property performance forecasts and commercial mortgage fundamentals. It includes the following features:
- Evaluation of the influence of various market factors (vacancy, rents, and cap rates) on return-on-equity (ROE), debt-service-coverage (DSC), and loan-to-value (LTV) ratios.
- Incorporation of stress testing to determine loss provisions, yield degradation, and risk-adjusted yield, and gain insights into future trends through the calculation of forward-looking distributions.
- The use of industry-leading Commercial Real Estate data sources to generate property-specific income and value forecasts for various economic scenarios.
- Analysis of commercial mortgage credit risk by employing probability of default and loss given default models, using a proprietary database with over 40 years of loan history.
For an in-depth video guide to the CMM rating model, click here.
Moody’s Long-Term Credit Risk Scores: Definitions
Moody’s long-term obligation credit risk scores provide an indication of the relative credit risk associated with fixed-income obligations that have an original maturity of one year or more. These scores indicate the potential risk that a financial obligation may not be fulfilled as promised. They take into consideration both the probability of default and the potential financial loss that may be incurred in the event of default.
Starting from mid-July of 2023 Estateguru will not publish projects on the platform that have a risk category below B.
