RARE Holdings’ latest Rating by Global Credit Rating Co. (GCR)
Global Credit Rating Co. (“GCR”) was established in 1996 as the African Arm of the New York Stock Exchange-listed Duff & Phelps Credit Rating Co. GCR rates the full spectrum of security classes and, together with its International Ratings Group affiliates, rates almost 1000 organisations and debt issues- spanning 4 continents. The rating and research activities can be sub-divided into the following key sectors: banks, building societies & discount houses; insurance, assurance & reinsurance; corporates & industrial borrowers; MFI’s; parastatals, utilities & local authorities; structured finance & securitisation; and healthcare.
GCR's rating methodology embraces those methodologies used by international rating agencies which employs analytical techniques that incorporate quantitative and qualitative factors. Ratings reflect an evaluation of the organisation's current financial position, as well as how the financial position may change in the future. In addition, analysis focuses on a range of administrative, economic and operational factors. GCR examines the ability of the organisation to meet its obligations under reasonable and stressful scenarios. Although this methodology focuses on rating general obligations, it is also relevant to specific debt issues. GCR's objective is to assign ratings that are applicable throughout the various stages of a business cycle.
GCR's analytical process focuses on the following key areas:
- Operational analysis
- Industry analysis
- Financial performance and ratio analysis
- Funding profile
- Management
The processes analyses the various ratios in relation to the previous year's and the industry in which the corporate operates. Key ratios analysed include:
- Profitability – turnover growth, operating profit margin
- Cash Flow – discretionary cash flow : net debt
- Coverage – Gross interest cover (operating income : gross interest) and net interest cover (operating income : net interest)
Cash flow and coverage ratios are deemed key credit protection ratios and are analysed in conjunction with gearing levels and funding structure.
An important aspect of GCR's analysis is an understanding of the strategic characteristics of an organisation and the quality of management. Ultimately GCR’s emphasis is on determining how these strategic aspects will affect the organisation's capacity to generate cash into the future.
RARE Holdings is rated by GCR every year. Click here to read the latest report from GCR.
