Our issue rating is awarded for a specific financial instrument (e.g. bond, promissory note loan). The issue rating reflects our assessment of the loss given default and the severity of loss for the specific financial instrument.
WHY IS AN ISSUE RATING IMPORTANT?
In their investment decisions, investors pay considerable attention to the rating which a rating agency awards to a specific instrument, e.g. a bond. For this reason, the issue rating is the main rating as it reflects the actual risk for the investor.
The issue rating is normally derived from the issuer rating and factors in the specific characteristics of the issue such as the creditor’s status in the event of insolvency. This depends on the issuing conditions such as the agreed subordination, negative declaration or financial covenants. As a result, a corporate bond may, for example, have a higher or lower rating than the rated company itself.