easy · Corporate Credit Analysis ratings
How does the 'Through-the-Cycle' rating philosophy used by agencies differ from a 'Point-in-Time' assessment?
- Point-in-time assessments are only used for sovereign ratings in emerging markets
- Through-the-cycle ratings fluctuate with quarterly GDP growth, while point-in-time ratings are stable
- Through-the-cycle ratings aim to smooth out cyclical variations to avoid frequent rating migrations
- Agencies use through-the-cycle ratings for speculative-grade debt and point-in-time for investment-grade
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