Nordic Credit Rating (NCR) today published its proposed methodology for investment holding companies, defining NCR's approach to analysing business and financial risks in investment holding companies and determining issuer ratings. The methodology is a standalone methodology with references to our Corporate Rating Methodology, where appropriate.
We are requesting comments on the proposed methodology and encourage interested parties to provide direct feedback via firstname.lastname@example.org by 7 October 2022. We will review all comments received, with the intention of publishing an anonymised summary of comments and the final criteria by the end of October 2022.
The proposed Investment Holding Company Methodology:
- defines our approach to rating investment holding companies, including investment holding companies with up to 50% total share value in operating entities;
- defines our approach to business risk and financial risk factors included in our indicative credit assessment;
- defines the weighting and guidelines for scoring business risk factors for investment strategy, asset diversity and portfolio liquidity;
- defines the weighting and guidelines for scoring financial risk factors associated with key ratios, risk appetite and financial flexibility; and
- defines adjustment factors leading to additional notching to capture features in excess of those reflected in our indicative credit assessment, such as excessive concentration, high-risk investment appetite, dividend control and diversity, low liquidity and other factors.
Impact on published ratings
The proposed methodology increases the scope of potential ratings and does not affect any published ratings.