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Institutional Investor Debt / Asset Based Finance

What is an institutional investor debt rating?

Institutional Investor Debt or Asset Based Finance Ratings analyze financial instruments whose issue proceeds are invested directly or indirectly - mostly via a special purpose vehicle (SPV) and/or fund structures - to finance specific assets or asset classes. The financing of underlying assets can be through senior and/or junior loan tranches, or capital shares. The underlying portfolio may consist of a larger blind pool component. Creditreform Rating has a track record of many years and the corresponding experience in the assessment of such financial instruments.

Creditreform Rating rates the following asset classes:

  • Real Estate
  • Private Debt/Equity – Corporate, Infrastructure, Real Estate, etc.
  • Infrastructure
  • Renewable Energy – wind parks, solar parks, etc.
  • Tangible Assets – airplanes, ships, containers, etc.
  • Student loans
  • Non-performing loans (NPL)
  • Microfinance operations

Who benefits from our ratings?

Due to our extensive experience in the field of asset based finance ratings, institutional investors have trusted our ratings for many years. We are partners of institutional investors such as pension funds and small insurance companies, which are regulated by the German “Anlageverordnung”, as well as large insurance companies, which are regulated by Solvency II.

As an ESMA-registered rating agency with an ECAI-status, our ratings can be used for regulatory purposes.

Rating process of Institutional Investor Debt / Asset Based Finance

The rating process covers the individual structure of non-tranched financial instruments and includes quantitative and qualitative analyses. Depending on the structure of the transaction, the credit risk or credit quality is analyzed using various analysis methods (e.g. Monte Carlo simulations or loan-to-value calculations). Depending on the results of the quantitative and qualitative analysis, the rating leads to a reliable and efficient assessment of credit quality. Finally, you will receive a rating report. The rating is usually monitored for one year.

The following diagram shows a simplified structure of a typical asset based finance transaction: