Fitch Releases 2006 India National Ratings Transition & Default Study
Fitch Ratings on 07 August 2007, released its annual India National Ratings Transition and Default Study, examining the performance of Fitch's national ratings in 2006 and over long term period from 1998-2006.
The study offers a detailed view of the historical and recent performance of the agency’s National Ratings, showing that National Ratings in India have similar characteristics to Fitch’s global corporate finance data, despite the smaller universe. Generally, higher-rated issuers have proved to have more stable ratings than lower-rated issuers.
The default study finds that the probability of default increases significantly with each incremental movement down the rating scale, but particularly when the movement coincides with a shift from investment grade to speculative grade. This remains true despite the relatively small sample size for Fitch’s Indian National Ratings
National Ratings have been primarily developed for use in emerging markets with low investmentgrade, or speculative-grade international Sovereign Ratings. As these ratings are unaffected by the movement of a country’s credit environment relative to other jurisdictions, they are of greater assistance to domestic users than international ratings. As with international ratings, National Ratings offer a relative ranking of creditworthiness, but on a different scale.
(This is the press release of Fitch Ratings)
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