man opening blue briefcase with documents

Disclosure Requirements Are A First Step To SPACs Rating Criteria


No blank check for SPACs.

Special purpose acquisition companies (SPACs) are shell companies that are admitted to trading on a trading venue with the intention to acquire a business and are often referred to as “blank check companies”. The European Securities and Markets Authority (ESMA) encourages National Competent Authorities (NCAs) to focus their scrutiny of SPACs prospectuses on a number of disclosure requirements.

ESMA counts the following among these requirements:

Risk factors, strategy and objectives, escrow accounts and the reinvstement of the proceeds, relevant experience and principal activities of the administrateive, management and supversiory bodies, conflicts of interest and sponsors,shares, warrants and shareholder rights, major shareholder, related party transactions, material interests, information on the proceeds of the offer, information on the intention of certian persons to subscribe in the offer, information on the offer price, and additional disclosure likely to be required to satisfy the Prospectus Regulation.

In practice, this provides a grid to which SPAC rating criteria can be linked. In fact, however, a large number of additional criteria are necessary in order to assess the risk of investing in SPACs. Therefore, compliance with disclosure requirements under this list must not be equated with an investment recommendation.

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GlobalCapital Celebrates KBRA


2021 Securitization Awards.

Kroll Bond Rating Agency (KBRA), a global full-service rating agency, was named “Securitization Rating Agency of the Year” by GlobalCapital at its U.S. Securitization Awards 2021.

“KBRA was founded in 2010 to set a standard of excellence and integrity, and we have been loyal to this notion since then,” Eric Thompson, Global Head of Structured Finance at KBRA, said. “It is an honor to be recognized by key market participants as the Securitization Rating Agency of the Year, proving that our founding principles and innovative approach have led us here. I’m proud to be part of a company that focuses on providing best-in-class service to investors—a common goal shared across all sectors.”

In 2011, KBRA issued its first rating in the CMBS sector. The company’s Structured Finance Group has since rated over 2,000 transactions. KBRA considers itself also a thought leader for its unique environmental, social, and governance (ESG) approach, setting them apart in the credit rating agency space.

“We look forward to continuing our engagement with the market and providing comprehensive, timely analysis,” Thompson said.

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Kickers Don’t Hit


URA Research GmbH is once again coming up with new insights into bonds.

After reviewing and analyzing the financial reports published in 2021, the URA ratings for 13 bonds were confirmed. For 2 bonds (FC Schalke 04 III and Katjes III) the assessment has deteriorated. The 4th bond from Schalke 04 and the 1st bond from Werder Bremen were newly included in the URA monitoring. In the case of follow-up bonds, the coupon usually falls due to the overall lower interest rate level.

“External ratings have almost not been obtained for a long time,” writes Jens Höhl, Managing Director of URA Research GmbH. When his company started as URA Unternehmens Ratingagentur AG in 1997, the prospects for external ratings on the bond markets in Germany were still different. While competitors continued and are now embroiled in scandals such as at the Greensill Bank, the URA wisely withdrew from this business of publishing credit ratings years ago and has since been working as a specialist with the company “URA Research GmbH“.

“Because of the frequent private placements, fewer and fewer securities prospectuses are published. At least the bond conditions improve in individual cases “, Jens Höhl continues, and at least there is no deterioration overall: e.g. obligation to publish financial reports after a certain period of time, sometimes also linked to interest rate step-ups, or limitation of financial debt or minimum equity ratio, involvement of trustees, e.g. for bonds based on the Nordic bond format.

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Big International Banks Kept Beauty


In its 2021 banking study, the independent Swiss credit research institute Independent Credit View AG (I-CV) examined the global banking sector.

A universe of 47 credit institutions in 16 countries – including the D-A-CH region – was scrutinized using a comprehensive analysis with a stress test. The good news is that the major international banks are doing better than feared. “They are not part of the problem this time”, writes I-CV.

Despite the pandemic and global recession, major international banks are generally in good shape. Only a few banks have structural problems. “Based on our current bank study, we expect mostly stable to positive developments this year and also in 2022. And this despite the probable rise in problem loan rates. We see a robust basis thanks to the progress made by the banks in terms of sustainable profitability, capital and liquidity – also as a result of stricter regulation. In addition, there is massive support from governments, central banks and banking supervision for households and companies and – ultimately – also the banks. The average I-CV rating level is between A and A- and is thus higher than in the previous five years,” says Christian Fischer, lead author of the I-CV banking study.

The I-CV Banking Study 2021 takes numerous questions into account: How much does the pandemic affect the credit profiles of banks? What are the long-term challenges for the business models of banks in terms of structural change? How long will the low interest rate environment last and how much does the long-term refinancing program of the European Central Bank help to counter the pressure on margins and to stimulate lending? And where can problem areas (black holes) open up in the banks’ balance sheets?

“With our extensive stress test, we have taken these questions and many other facts into account in order to provide bond investors with important guidance for their investment decisions. 29 European and 11 North American banks as well as 7 credit institutions from Australia and Singapore were put through their paces,” says Fischer.

North America & Asia versus Western and Southern Europe: the gap is widening
Regarding the results of the study, Fischer says: “The iceberg problem in the banking sector is the tail risks in credit and trading books as well as an appropriate identification and control of risks (the Archegos bankruptcy is an example). In general, 2020 and Q1-2021 surprised both positively and negatively. Despite solid financial figures, the business models of individual banks speak against a more positive view of creditworthiness. The macroeconomic situation and corona-endangered industries remain the most important risks in the short term. If there are no major geopolitical crises and market dislocations, the gap between banks from North America and the Asia-Pacific region on the one hand and banks from Western and Southern Europe on the other is likely to widen in the medium term. The latter suffer from overcapacity and often do not earn their imputed capital costs. In investment banking, European banks are struggling to keep up with US investment banks only in sub-segments, but they are in danger of losing ground. Spreads and yields for bonds from all layers of the capital structure of the banks (senior preferred, senior non-preferred, tier 2, additional tier 1) as well as the risk differentiation are often insufficient”.

In conclusion, banking expert Fischer says: “We recommend bonds along the entire balance sheet structure of defensive banks with good credit ratings. While senior preferred instruments are acceptable for all banks in the study, we recommend senior non-preferred and subordinated bonds only for selective issuers. We would focus on new issues (premium) as well as terms (first call dates) in the shorter range. In addition to the above-mentioned banks from North America and the Asia-Pacific region, Northern European credit institutions are among the banks with the highest creditworthiness and therefore security-conscious investors should pay special attention to them. “

A Liberal, A Banker of the Year


Who secures the Aaa of EIB.

Liberals are not exactly popular among bankers, as they stand for competition and a market economy, where many bankers want state protection and privileges. This makes the award for Dr. Werner Hoyer, President of the European Investment Bank (EIB) as Banker of the Year, particularly noteworthy. The laudation from President of the European Commission, Ursula von der Leyen, contains many deserving facts and can be read here. Werner Hoyer is a member of the FDP, the Free Democratic Party in Germany, where he made his career up to the Foreign Office.

Werner Hoyer has been at the helm of the EIB since 2012, which, like few other banks in Europe, also has the undisputed top rating from all major credit rating agencies. Moody’s just released a report with lots of detail.

“The credit profile of the European Investment Bank (EIB) reflects its strong financial metrics, including robust asset quality and asset performance as well as unfettered access to diverse funding markets. The EIB has a long track record of very low levels of non-performing loans (NPLs),” writes Moody’s Investors Service in its “Issuer In-Depth” annual credit analysis, “reflecting its prudent project selection as well as effective monitoring and superior risk-management capabilities.”

According the international rating agency, the EIB is also among the few supranational issuers with access to central bank liquidity, in its case to the European Central Bank’s (ECB) main refinancing operations as well as the Swiss National Bank (SNB): “This ensures access to liquidity in the highly unlikely event it lost access to the capital markets.”

Moody’s sees among the EIB’s shareholders, the EU member states, a strong willingness and ability to support the bank if required. In a stress scenario, says Moody’s, the EIB would be one of the few sources of long-term funding for projects in the EU countries. The EIB is also the key institution implementing the European Fund for Strategic Investments (EFSI) and its successor programme, InvestEU. Similarly, the EIB has played an active role in the EU’s coronavirus crisis response.

“The EIB’s credit challenges, which are marginal at the Aaa rating level, stem from its high leverage compared to many peers as well as only moderate liquidity buffers, although its lending activities carry low intrinsic risk. Moreover,” argue Moody’s experts Steffen Dyck, Raphaele Auberty, Dietmar Hornung and Alejandro Olivo, “leverage has been on a declining trend over the past several years, and the comparatively only moderate liquidity position is mitigated by ECB access, very strong liquidity management and the generally high quality of treasury assets.”

Accodring to Moody’s findings, the EIB’s capital base is now stronger than it was before the United Kingdom’s (UK, Aa3 stable) exit on 31 January 2020 after its remaining shareholders replaced the UK’s share, and Poland (A2 stable) and Romania (Baa3 negative) provided additional capital.

But even with the best conditions, political and economic common sense in the member states of the EU is also important for the EIB: “Downward pressure on the EIB’s rating could emerge in a scenario of a significant and multiyear deterioration in its intrinsic financial strength coupled with a reduced ability to provide support (as evidenced by material rating downgrades of key shareholders), or if shareholders demonstrated less willingness to provide support in case of need.”

Moody’s credit analysis elaborates on EIB’s credit profile in terms of capital adequacy, liquidity and funding and strength of member support, which are the three main analytical factors in Moody’s Supranational Rating Methodology.

elegant young teenage female standing in green park with horse

ESG-Rating: Animals Count more than Humans


Mistreating workers is not as important as mistreating animals.

Consumers play an active role in the application of ESG criteria, i.e. Environmental, Social, and corporate Governance data that refers to metrics related to intangible assets within the enterprise. A survey throws a dubious light on the values of American and German consumers.

According to a survey published by Statista, the number one reason to “cancel” a brand – or at least boycott or protest them – is the mistreatment of animals: “Animal cruelty was named as the top reasons why consumers would give up on a brand in all three countries included in the Cancel Culture survey which is a content special of the Statista Global Consumer Survey. 44 percent of the more than 1,500 U.S. respondents said they would give companies mistreating animals the boot, ahead of the mistreatment of workers at 41 percent. UK respondents saw things similarly, while in Germany, worker mistreatment only came in rank six after environmental harm, corruption, health concerns around products and racism.”

Infographic: What Companies Get Canceled For | Statista You will find more infographics at Statista
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Ernst & Young No Longer Has Any Equity On Its Balance Sheet


Auditors have been making double-digit million losses for years.

At Ernst & Young GmbH Wirtschaftsprüfungsgesellschaft (EY) in Germany, “equity” is on the assets side, namely as a “deficit not covered by equity” in the amount of € 62,715,000. The provisions, liabilities, deferred income as well as deferred taxes and fiduciary obligations exceed the company’s assets by an eight-digit amount in euros within a year. Receivables against this company are therefore no longer fully covered by assets on the balance sheet.

The trend line that had to be shown here for equity and equity ratio for EY on March 3, 2021, continues as expected. According to the consolidated financial statements and group management report as of June 30, 2020 of the Stuttgart-based parent company, the company no longer has any equity. Turnover was weaker than that of the other large auditors in Germany.

Under the chairman of the supervisory board, Georg Graf Waldersee, the German company has only made losses for years. This is also the case in the current reporting period. In the consolidated income statement for the financial year from 07/01/2019 to 06/30/2020, the consolidated net loss for the year is stated at € 49,608,000.

The billions in damages from the Wirecard scandal are not included: “In connection with the Wirecard case before and after the balance sheet date, claimants attempted to assert civil claims against us with out-of-court letters. On June 30, 2020, we were served complaints from investors that were judged to be unfounded both internally and by the law firms commissioned to defend us.”

Georg Graf Waldersee also chairs the supervisory board of Scope SE & Co. KGaA. In the case of the Berlin rating agency, the losses have been accumulating since the early 2000s, despite the exhaustion of numerous options under company law. The “Scope Group” has been writing a story of ongoing reported equity destruction for almost two decades. To reach break-even, the takeover of other rating agencies was also unsuccessful. The group currently includes two rating agencies registered by the European Securities and Markets Authority (ESMA), which currently operate under the name “Scope Ratings GmbH” or, more recently, “Scope Hamburg GmbH” and have various websites on the Internet. Scope Ratings GmbH has already been reported in connection with the Greensill scandal.


No Vaccination Against Bad Loans


Keynote of Prof. Dr. Joachim Wuermeling, Deutsche Bundesbank, at NPL Forum in Frankfurt am Main.

“NPL dismantling” provides one of the keywords for the speech of Prof. Dr. Joachim Wuermeling, Member of the board of the Deutsche Bundesbank. In his keynote at the Frankfurt School’s NPL Forum he widens the view and takes a look to Europe. “Because: When it comes to NPL, we have to think and act European. Even if the stocks of non-performing loans in Germany are low, they can become a problem elsewhere in the euro area, initially for the respective country itself, but also for the euro area as a whole.” He sheds light on three aspects.

  • First: “In the past few years, we have made important progress in reducing the NPL in the euro area. While the NPL inventory of significant institutions in the euro area was almost € 1 trillion in mid-2016,” says Joachim Wuermeling, “it had more than halved by the end of last year, to just under € 450 billion.” However, the stocks are still very unevenly distributed across the countries of the euro area. Key milestones in this NPL decline were the ECB’s 2017 NPL Guide and the 2018 Addendum. The guide primarily targets non-performing loans that were built up during the financial crisis. “The addendum, on the other hand, formulates supervisory expectations for risk provisioning for new NPLs, so it has a preventive effect. However, following the progress made in reducing the NPL in recent years, the pandemic could now turn the trend.”
  • That is Joachim Wuermeling’s second point: a renewed spike in non-performing loans is probably only a matter of time in the euro area. As soon as the support measures expire, he expects to see an increase in the NPL level. “Basically it is of course part of the banking business that individual borrowers get into payment difficulties; that cannot be avoided at all. Banks must write-down or write-off loans as necessary, and they must collect and dispose of collateral. But here, too, the dose makes the poison”, warns Joachim Wuermeling. Through higher provisions, rising NPL stocks have a negative impact on the already weak profitability of European banks. This could also affect their solvency as a result. The higher the NPL rate in the system and the more uncertain the economic situation, the more likely investors and depositors are to question the quality of bank balance sheets and the ability of the institutions to make further value adjustments and absorb possible losses. “It is therefore important to take countermeasures now”, Joachim Wuermeling calls for action. “This will pose challenges in particular for those institutions and countries that already had a high level of non-performing loans before the pandemic began.”
  • Supervision and politics are already acting, says Joachim Wuermeling. In December 2020 the ECB sent another “Dear CEO Letter” to the significant institutes. “Among other things, it makes it clear what to expect in terms of risk provisioning. It also collects information on how banks deal with credit risks and how they determine the necessary risk provisions. There is no intention or reason to soften the ambitious NPL rules. And the EU Commission is also providing important impetus with its NPL action plan of December 2020. In this plan, the Commission proposes new measures and takes up the outstanding aspects of the 2017 Council NPL Action Plan. The Commission wants to facilitate the handling of Covid-related NPLs at an early stage and thus prevent a renewed accumulation of non-performing loans on European bank balance sheets.” The focus is on measures to promote secondary markets, set up asset management companies and improve insolvency frameworks. The Commission also comments on precautionary public support measures.

With a view to the secondary markets, the main thing is more transparency. The Commission’s proposals could make an important contribution here, says Joachim Wuermeling: a common data set and data standard for NPL transactions within the EU would make the markets more transparent. Data quality, data comparability and data infrastructure are the key words.

Joachim Wuermeling also welcomes the Commission’s proposal to set up and network national Asset Management Companies – AMCs for short. “However, this must be done on a voluntary basis, without community funding and in accordance with EU state aid rules.”

AMCs have already proven themselves in the past as a tool for NPL reduction. By means of economies of scale, better coordination of creditors and the pooling of expertise, they can help to clean up bank balance sheets. “The proposals in the action plan are correct – but they must also be taken up and followed up.” Joachim Wuermeling points to some initiatives: the EBA is currently consulting its standardized NPL data templates, which have been reduced in scope, and the Commission is putting its proposal for a European data hub up for public discussion by early September.

Ultimately, however, the banks themselves have to set up value adjustments in good time and in line with the risk in order to counter an increase in non-performing loans. “This is probably the most important lever to arm yourself for a Europe-wide increase in non-performing loans and to prevent negative repercussions on the real economy”, says Joachim Wuermeling.

This is how he sums up his remarks at the Frankfurt School:

  • First: “We must not allow ourselves to be lulled into deceptive security by the still low number of corporate insolvencies. As soon as the state aid runs out, bankruptcies are likely to rise. The rise in non-performing loans should be limited for German credit institutions. Nevertheless, caution remains the order of the day.”
  • Second: “The German banks are in good shape. They are more resilient and better equipped with capital than they were a few years ago. But they have to catch up in risk management: they have to create more transparency with regard to credit risks and improve their data skills.”
  • Third, bad loans are a European issue: “After the progress made in recent years in reducing NPLs, the pandemic could now turn the trend. It is all the more important to take countermeasures now. The EU Commission does this with its NPL Action Plan of December 2020. Now it is time to implement the proposed measures.”

There is no vaccination against bad loans. Nevertheless, banks have many options for getting themselves into a form in which post-Covid cannot harm them.

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Ilija Batljan’s Rating Shopping Spree


Are upgrades driven by improvements in creditworthiness or by hopping from agency to agency?

The activities of self-made millionaire Ilija Batljan are too conspicuous to be ignored in the financial markets. Ilija Batljan came to Sweden from Montenegro. He moved to Sweden in 1993 during the breakup of his native Yugoslavia and in 1996 earned a B.A. in economics at Stockholm University, later disputing in 2007. A man with a migration background, Ilija Batljan quickly made a career in politics and became mayor of Nynäshamn in 2005 and campaigned against wealth and property taxes in his Social Democratic Party of Sweden in 2010.

There is now a long list of companies in which he plays or played the role of investor, Chairman, Chief Executive Officer and/or Director:

However, the long list of mandates and investments does not suggest diversified assets and balanced risk positions. Some of the mandates are subsidiaries or small companies. His largest investments is reportedly Samhällsbyggnadsbolaget i Norden AB (SBB). According to the shareholder structure as of March 31, 2021, Ilija Batljan held (private and through company) 8.46 % of share capital and 32.54 % of votes in SBB.

Moody’s Single B Credit Rating Category

Anyone looking for information from the internally recognized credit rating agency Moody’s Investors Service on the high debts of Ilija Batljan’s numerous companies will have to go back years in their research. Moody’s Investors Service had on November 8, 2017 assigned a first-time B1(Single B One) corporate family rating to Samhällsbyggnadsbolaget i Norden AB (SBB), a Stockholm-based real estate company. controlled by CEO and founder Ph.D. Ilija Batljan. The outlook on the rating was Stable. According to Moody’s rating scale, obligations rated B (Single B) “are considered speculative and are subject to high credit risk“. Moody’s appends numerical modifiers 1, 2 and 3 to each generic rating classification from Aa through Caa.

At the time and according to Daniel Harlid, a Moody’s Assistant Vice President, Analyst and also Lead Analyst for SBB, the B1 (Single B One) rating reflected the company’s midsized property portfolio of low risk community services and residential properties in Sweden and Norway, reflecting the company’s focus on rental income from regulated markets or activities that are, in one way or another, funded by the government.

On November 8, 2017 the B1 (Single B One) corporate family rating assigned to SBB reflected all the company’s strenghts (see Moody’s):

  • high share of low-risk revenue derived from residential properties in Sweden, community service properties, as well as offices in Sweden and Norway;
  • high share of revenue generated from public tenants (over 30%);
  • diversified tenant base and property portfolio, with almost full occupancy;
  • long lease maturity profile, with an average lease length of seven years;
  • good deal-sourcing capabilities, leading to a medium-sized portfolio of SEK 22.1 billion as of the third quarter of 2017, only after 20 months since the creation of SBB; and
  • expected positive free cash flow, which will fund capital spending.

Despite all these favorable factors, it was only enough for a B1 (Single B One) rating, since the credit rating also reflected a number of challenges such as a low unencumbered asset ratio, properties located in small cities and in less liquid real estate markets than in the metropolitan area and elevated leveraged.

On April 10, 2019 Moody’s had withdrawn the corporate family rating of SBB. At the time of the of withdrawal the rating was still B1 (Single B One) and had a positive outlook. Moody’s had decided to withdraw the rating for its own business reasons: “Please refer to the Moody’s Investors Service Policy for Withdrawal of Credit Ratings, available on its website,” Ultimately, it remains in the dark what would have happened to the rating and the outlook if Moody’s had continued to assess the company. The rating history has ended.

Credit Rating Agency (CRA) - Definition of "Rating Shopping"

“Rating shopping can be understood as occurring when an issuer engages with a number of credit rating agencies with a view to selecting only those credit rating agencies that will provide the most favourable assessment for the entity or debt instrument. In choosing to appoint only those credit rating agencies that provide the most favourable assessment, risks are created for investor protection and financial stability. Specifically, risks of ratings inflation and lack of applied methodological rigour. While concerns around this practice were initially focused on structured finance ratings, recent revisions of the CRA Regulation have expanded the area of focus to the broader spectrum of entities and debt instruments assessed by CRAs.”

Source: Consultation Paper - Guidelines on Disclosure Requirements for Initial Reviews and Preliminary Ratings, European Securities and Markets Authority, May 26, 2021, ESMA33-9-412, p. 5.

S&P Global Ratings’ Triple B Rating Category

On January 15, 2018, S&P Global Ratings had SBB assigned a BB (Double B) rating with stable outlook. This was SBB’s second public rating from a leading credit rating agency and was a two step improvement over the first rating the company received in November 2017 from Moody’s.

On April 26, 2019, S&P Global Ratings announced that SBB had been assigned a BBB- (Triple B Minus) rating with stable outlook. This upgrade came after a competitor of S&P Global came into play, namely Fitch Ratings with its BB+ (Double B Plus), which superseded Moody’s B1 (Single B One).

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On May 5, 2020, SBB reported that SBB had been informed by the Swedish Economic Crime Authority that the company’s CEO Ilija Batljan had been detained in custody on alleged violation of the Market Abuse Regulation. The company had no additional information at this stage and did not know which company or security these allegations relate to. During Ilija Batljan’s absence, SBB’s deputy CEO Krister Karlsson was acting CEO for SBB.

Although SBB had been informed that the company’s CEO had been released from custody, the credit rating agency S&P Global announced on May 8, 2020, that they were placing SBB on Credit Watch Negative due to ”at this stage, there are some uncertainties about how” the charges against the CEO ”will affect SBB’s management and operations, including deleveraging plans which may take longer than S&P previously anticipated”.

On June 10, 2020, S&P Global Ratings affirmed SBB’s “investment grade” rating BBB- (Triple B Minus) with stable outlook and removed SBB from Credit Watch Negative. That means that SBB’s new rating was from that day on BBB- (Triple B Minus) with stable outlook for ratings on the company and its senior unsecured debt.

“Thanks to SBB’s focus on deleveraging, despite its strategy to continue to expand its portfolio, we expect the company will maintain or improve its credit metrics over 2021-2022”, wrote S&P Global Ratings on March 1, 2021. “We are therefore revising our outlook on SBB to positive from stable and affirming our ‘BBB-‘ (Triple B Minus) issuer credit rating on the company. We are also affirming our ‘BBB-‘ (Triple B Minus) ratings on the senior unsecured debt and ‘BB’ (Double B) rating on the subordinated hybrid instruments.”

Fitch Ratings’ Triple B Rating Category

On May 30, 2018, there was better news for SBB, namely from Fitch Ratings by its “Long Term Issuer Default Rating”: SBB had now been rated BB (Double B) by these analysts. On April 8, 2019, there was an upgrade to BB+ (Double B Plus). A little later it went up to BBB- (Triple B Minus) on April 16, 2019. It stayed that way to this day. The credit rating for the debt level “subordinated” remained at BB (Double B).

The close temporal relationship between the end of Moody’s rating and the upgrade by Fitch Ratings is striking. It was only on April 8, 2019 that Fitch ratings upgraded to BB+ (Double B Plus), two days later Moody’s removed its rating for the company. That was good business for SBB, because according to the EU regulation on credit rating agencies and due to the recognition of Fitch Ratings, the rating of this agency has about the same legal significance as that of Moody’s.

Scope Ratings’ Triple B Rating Category

Although Ilija Batljan already had relationships with Moody’s Investors Service, S&P Global Ratings and Fitch Ratings, his choice for the credit rating of his investment company “Ilija Batljan Invest AB” falls on another, less well-known rating agency in Germany: There is a local credit rating agency in Berlin.

That credit rating agency currently operates under the name “Scope Ratings GmbH”, maintains a website on the Internet and presents itself as “the leading European provider of independent credit ratings” though with a market share of less than 1%.

The European Securities and Markets Authority (ESMA) imposed sanctions on this agency, but it is a legally registered agency according to the EU regulation on credit rating agencies. According to the regulation, the ratings of this agency thus have practically the same legal meanings as the ones of the internationally recognized credit rating agencies. In contrast to the credit ratings by the leading agencies, the ratings of “Scope Ratings” are not used by the European Central Bank for specific purposes, but – according to the rating agency’s own company news – by the central bank in Sweden, Sveriges Riksbank.

According to the decision by the Executive Board, the Riksbank may purchase bonds issued in Swedish krona by Swedish non-financial corporations. This process of money creation brings significant advantages for the privileged companies. SBB is already one of these companies.

The bonds the Riksbank may purchase must have, among other requirements, credit ratings no lower than Baa3 (Baa Three) or BBB- (Triple B Minus), from anyone of the credit rating institutes Standard & Poor’s, Moody’s, Fitch Ratings, Nordic Credit Rating or Scope Ratings, or if they have no such rating, be issued by companies with credit ratings no less than Baa3 (Baa Three) or BBB- (Triple B Minus) from the same credit rating institutes.

On May 28, 2021 Scope Ratings has assigned a first-time issuer rating of BBB- (Triple B Minus) to Ilija Batljan Invest AB. Scope Ratings has also assigned a first-time rating of BBB- (Triple B Minus) to the company’s senior unsecured debt. Even before the crisis, the Ilija Batljan Invest AB (IB Invest) reported losses, as shown in the published financial statements up to 2019. More recent figures are not yet reported here.

Ilija Batljan Invest AB’s cash flows are from recurring income from its core holding SBB i Norden and direct/indirect real estate investments. “The majority of IB Invest’s financially relevant holdings (87% of gross asset value and 78% income contribution) are publicly listed companies in well-developed markets”, says Scope Ratings GmbH in its report named “Scope assigns first-time rating of BBB-/Stable to Ilija Batljan Invest AB” and continues: “The remainder are either direct or indirect real estate holdings with decent assessed liquidity or unlisted shares in growth companies.” Scope Ratings GmbH acknowledges that the “business risk profile is somewhat held back by its limited diversification“.

Provided that the factual information from the Berlin rating agency is correct, the rating result of the Berliners is surprising against the background of the above ratings from the other agencies. Ilija Batljan Invest AB’s creditors can only be satisfied from the cash flows that the company receives from its assets. These assets mainly include the investment in SBB. However, if SBB’s subordinated liabilities are only to be found in category BB (Double B), then the payments to SBB’s shareholders must be exposed to even greater risks because they are subordinate to SBB’s creditors. The shareholders only receive residual income.

As Scope Ratings itself shows, the portfolio of Ilija Batljan Invest AB is concentrated on comparatively few exposures, which account for the largest part of the risk. Therefore, the positive diversification effects cannot be great. It is questionable whether the income from the other commitments would be sufficient to hold Ilija Batljan Invest AB’s creditors harmless in the event of a failure by SBB. Investors must therefore check whether the rating issued by Scope Ratings does not need to be repaired.

On May 17, 2021 Ilija Batljan Invest AB was requesting the approval from holders of its up to SEK 1,000,000,000 Senior Unsecured Floating Rate Notes due 2022 (ISIN: SE0013122009) to refinance the Notes in full before the Maturity Date. In order to refinance the Notes in full before the maturity date for the purpose of managing the Company’s debt maturity profile by way of adding a call option at 104.00 per cent of the nominal amount, the Company had instructed the agent, Nordic Trustee & Agency AB, to initiate a written procedure for its outstanding Notes. Not necessarily, but possibly: Such a negotiation process can also be an expression of a liquidity bottleneck or an impending insolvency, among other things.

It was the declared intention of the Ilija Batljan Invest AB "to evaluate an acquisition of a corporate rating from Scope (or similar rating agency) with a clear ambition to reach Investment Grade and to list any new Market Loan(s) issued on Nasdaq Stockholm". 

This is not just an internal announcement. Rather, the intentions were made public. It must therefore have been clear to every analyst at Scope Ratings which expectations of the issuer they have to meet. If they did not give an "investment grade" rating, the contract would go to another agency. However, since the Scope Group has never made a profit for almost two decades and the agency's analysts probably believe that the agency must break even if possible, the credit analysts are under great pressure. In addition, the analysts at Scope Ratings must have been aware that the growing circle of profit-seeking shareholders in Scope SE & Co. KGaA has developed ever higher expectations with regard to the agency's expected profits over the years.

Under the outlined conditions, it seems plausible that the cash flows to be expected from Ilija Batljan Invest AB cannot be rated at the same level as those of SBB, from which these cash flows are obtained, although in addition to those from other, smaller investments. Rather, it stands to reason that the same cash flows are leveraged multiple times here: At the level of subsidiaries and parent companies as well as at the level of the investment vehicle Ilija Batljan Invest AB. With every additional leverage and additional debt, the risk might increase, especially if there are no profits that could be distributed or transferred to reserves.

Furthermore, the question should be investigated whether the change of credit rating agencies and the rating order to a lesser-known, local rating agency from Berlin arose from the will to provide more transparency for creditors, or from the greed for better ratings for an even higher level of debt. The question of why a local rating agency on the Stockholm doorstep, namely Nordic Credit Rating, was not commissioned, which could know the Ilija Batljan’s group of companies even better, can also be investigated. Nordic Credit Rating would also have met the central bank’s requirements, Riksbank’s formal criteria.

While it became known for Greensill Bank that the chairman of the Greensill Bank‘s supervisory board was also an investor and advisory board member at the local agency in Berlin and that it helped Lex Greensill to get and maintain even an A- (Single A Minus) rating until six months before insolvency of his bank, it is not known whether Iljia Batljan is also involved in that same credit rating agency. Because of the multi-level business model of the Scope Group and the intransparent shareholder structure of Scope SE & Co. KGaA it is not known who is shareholder and at the same time beneficiary of a benevolent credit rating of the rating agency. In any case, it is known that the agency has tried to collect money through numerous road shows not only in Berlin, but also in other cities.

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Insolvent Greensill Bank Relied on “Scope Risk Solutions”

Agencies, Auditors, Authorities, Regulations

The German supervision missed the chance to intervene.

“It cannot be right for a rating agency to give a bank a rating and at the same time advise on the analysis,” the Frankfurter Allgemeine Zeitung quotes Frank Schäffler (FDP), a member of the German Bundestag. “That stinks to heaven,” is how the financial expert sums up the findings that the Federal Government of Germany had to disclose about a local credit rating agency in Berlin. The Berlin credit rating agency currently operates under the name “Scope Ratings GmbH”, maintains a website on the Internet and presents itself as “the leading European provider of independent credit ratings” with a market share of less than 1%.

The Federal Government’s responsibility for undesirable developments at Greensill Bank in Bremen apparently extends further than previously known. This can be seen from the response of the Federal Government to the “Kleine Anfrage” from MP Frank Schäffler et al. and the parliamentary group of the FDP in the Bundestag. The answer reveals new facts about the Greensill Bank insolvency.

As important as the answers given by the Federal Government are, the Federal Government fails to answer important questions. This emerges from the Bundestag printed paper (BT-Drucksache 19/30208) dated June 1, 2021: “Reactions of the federal government to the rating of Greensill Bank AG”.

Greensill Bank not only had a chairman of the supervisory board, who was also an investor and advisory board member of the Berlin rating agency that gave the rating, but also relied on “Scope Risk Solutions” to conduct credit analysis.

“The annual auditor of Greensill Bank reported in the 2019 audit report on the outsourcing of ‘preparation and ongoing monitoring of credit analysis’ to Scope Risk Solutions GmbH, a sister company of Scope Ratings GmbH and at the same time a subsidiary of Scope SE & Co. KGaA (Scope Group)”, writes the Federal Government.

It is therefore clear that the conflicts of interest maximized at Greensill Bank: Scope Risk Solutions GmbH “analyzed” the credit risks for Greensill Bank, but at the same time the result of this work was “assessed” by Scope Ratings GmbH itself. Scope provided risk management and then assessed how good it was – and that was also “controlled” by the same supervisory board or advisory board.

The audit reports of Greensill Bank are not publicly available, so that creditors had to rely on the intervention of the Federal Government or the Federal Financial Supervisory Authority (BaFin), which had access to the audit reports.

An important warning signal was overlooked: In 2019 there was not only the “A-” (single A minus) credit rating from Scope Ratings GmbH, which was published, but also a rating from another recognized credit rating agency, the GBB-Rating in Cologne, which belongs to the Auditing Association of German Banks. This credit rating was not published. There is no doubt that the former managing director of the auditing association, Eberhard Kieser, still knew “his” rating agency when he was responsible for the Greensill Bank‘s supervisory board where he was sitting alongside the investor of the Scope rating agency, Maurice Thompson. Since this rating was not published, it can be assumed that it was not advantageous for Greensill Bank to publish GBB-Rating’s credit rating as well.

“According to Section 10 (4) of the Ordinance on the Financing of the Compensation Scheme of German Banks GmbH and the Compensation Scheme of the Federal Association of Public Banks Germany GmbH, CRR credit institutions must transmit all current ratings related to them in order to calculate the contributions to the compensation scheme. Correspondingly, the ratings of Scope Ratings GmbH and GBB-Rating were used for the Greensill Bank‘s 2020 contribution calculation ”, says the Federal Government in it’s response. The result of this calculation would allow conclusions to be drawn about the rating issued by GBB-Rating, which BaFin must have been aware of. Instead of disclosing the contribution made by Greensill Bank to the compensation scheme, the federal government has placed this information under confidentiality.

The Federal Government claims not to have an overview of the fact that there were hardly any private banks in Germany in 2019 that were rated better than Greensill Bank: “A comparative evaluation of publicly available ratings for all private German banks is not carried out on a monthly basis.” However, the information content of the rating results precisely from the relative classification on the ordinal scale – thus the answer of the Federal Government, in which it relies on the information provided by BaFin, shows that it obviously did not understand key functions of credit ratings in banking supervision.

For example, the data from the Central Repository (CEREP) of the European Securities and Markets Authority (ESMA) are not used by the German supervisory authority. The CEREP is supposed to keep all rating data ready: “The Federal Government has no knowledge of this. The central register with statistical data on rating agencies (CEREP) lies in the exclusive area of ​​responsibility of ESMA and therefore outside the supervisory area of ​​BaFin.” The Federal Government is therefore not even able to give an answer as to who exactly and under what aspects the data supplied by Scope Ratings to CEREP are checked.

The Federal Government is also “blank” when it comes to the question of what role Scope’s ratings played for municipalities for their investments in Greensill Bank or whether municipalities or other public institutions had an alternative opinion or private ratings. “The federal government has no knowledge of this.” As a result, the federal government was not aware of the far-reaching consequences of the conditions it permitted at Greensill Bank.

The Federal Government did not take any measures to protect against conflicts of interest at Scope: “The parallel activity of Scope Ratings GmbH and Scope Risk Solutions GmbH for the bank and the Greensill Group became known to BaFin since receipt of the final report on the report carried out at Greensill Bank Deposit protection audit of the Auditing Association of German Banks (PdB) announced on June 15, 2020. “

In addition, BaFin had not investigated the personal links: “In March 2021, BaFin learned from press articles that the chairman of the Greensill Bank‘s supervisory board was acting as an advisor for the Scope Group.” The fact that the long-standing board of directors of the Auditing Association of German Banks also sat on the Greensill Bank’s supervisory board is not even mentioned.

“In retrospect, the existence of conflicts of interest between the Scope Group and the Greensill Bank, which may arise from the aforementioned issues, cannot be ruled out,” concludes the Federal Government, whose government members had many contacts with the numerous advisory and supervisory board members of Scope.

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The Greatest Risk Was Not Reported


A local rating agency failed to talk about the elephant in the room.

Greensill Bank’s risk through its involvement in the GFG group of steel magnate Sanjeev Gupta was greater than the rating report of a local rating agency in Berlin indicated. The Greensill Bank AG Issuer Rating Report, which established a rating of A- (Single A Minus) in 2019, did not contain any indication of such an extent of this risk. It is not clear from the report whether the risk was recognized at all or whether it was intentionally not mentioned.

The benevolent rating was retained until September 2020, just six months before Greensill Bank went bankrupt. In September 2020, the rating was downgraded to BBB + (Triple B Plus), which is still “investment grade”.

According to the insolvency report that quotes, the “Gupta Group” accounts for a whopping 2.95 billion euros of the total of 3.86 billion euros in receivables – the equivalent of 76%.

The Berlin rating agency is used, among other things, by the entrepreneurs involved in the agency to obtain ratings for their companies and to effect officially recognized credit ratings in accordance with the EU regulation on credit rating agencies.

Greensill Bank was one of the clients of the rating agency in Berlin, which gave the bank an “investment grade” rating. The Chairman of the Supervisory Board of Greensill Bank, Maurice Thompson, was both an investor and a member of the advisory board of the responsible rating agency. To provide so called “credit ratings”, that rating agency in Berlin operates under the name “Scope Ratings GmbH”.

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Political Network Makes It Possible


Berlin network of politicians, raters and auditors.

Wirecard illusion factory only conceivable through political network”, is a quote from the Cicero, the German magazine for political culture. The members of the committee of inquiry have an unequivocal answer to this. The Christian Democratic Union (CDU) sees Finance Minister Olaf Scholz at the center of the billion dollar scandal.

Fabio De Masi, chairman of the left in the committee, accuses the supervisory authorities of not being fit for the digital age. “This billion-dollar lie, this Wirecard illusion factory was only conceivable because they organized a political network.” BaFin not only let its supervision of Wirecard slip, but even wanted to actively protect the company. Lisa Paus, chairwoman of the Greens, also made the EY auditors jointly responsible, for years they had lacked “the critical attitude”.

The serious extent of the Wirecard scandal could be limited with damage worth billions, said FDP chairman in the investigative committee, Florian Toncar, in Berlin, quoted by Cicero,. The responsible authorities intervened too late, neither the Federal Financial Supervisory Authority (BaFin) nor the anti-money laundering unit FIU, both of which are subject to the supervision of the Federal Ministry of Finance, attempted to clarify the matter in good time, explained Toncar.

According to the Munich public prosecutor’s office, “commercial gang fraud” can be assumed at Wirecard, which should go back to 2015. The auditing company Ernst & Young had confirmed Wirecard’s annual financial statements for years.

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Artec Technologies Upgraded


Artec technologies AG (ISIN DE0005209589) is once again awarded an eligibility status for central banks by the Deutsche Bundesbank as part of the current creditworthiness analysis.

“The credit rating is comparable to an investment grade rating from Standard & Poor’s according to the S&P’s rating scale, the credit rating for artec has been raised from BBB- (Triple B Minus) to BBB (Triple B)”, reports the company.

The balance sheets for the past three years form the basis for the credit check by the Deutsche Bundesbank. In addition, the company-specific circumstances, the current company development and the future potential are also included in the assessment. “The positioning in the competition is also analyzed”, emphasizes artec technologies.

The core of the creditworthiness analysis was the 2020 annual financial statements. During this period, artec technologies developed positively and met the forecasts. In principle, artec plans to continue its growth path in 2021 and beyond. AI-based solutions for security authorities and the media industry should continue to be the growth drivers of artec in the future.

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Inflation Augur Sees Evidence


In May 2021, the US Consumer Price Index rose 5% year-on-year (after 4.2% in April 2021).

“Projected over the year,” says Dr. Thorsten Polleit, Chief Economist of Degussa Goldhandel GmbH in Frankfurt am Main, “the monthly increase was 10.1%.”

The price drivers were petrol (+ 2.1% compared to the previous month) and used cars (+ 7.3% compared to the previous month). “Core inflation” (ie consumer goods excluding food and energy) rose by 3.8% year-on-year. The sustained high growth in the money supply in the USA speaks for a high rate of monetary devaluation in the coming months, forsees Thorsten Polleit.

“Inflation will also become increasingly apparent in other currency areas – especially in the euro area. The central banks, which are responsible for the inflation of prices with their flood of money, are continuing their inflationary work”, predicts Thorsten Polleit.

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Influence of the Losses of the German EY


Are the French afraid of assuming losses from the German EY?

After more than two decades at KPMG and half a decade at EY, Yannick de Kerhor left EY to set up a new company, Paris-based EKEM Partners. The new consultancy will team up with EOS Deal Advisory, the London firm run by two former senior partners at KPMG UK. De Kerhor co-founded EKEM alongside veteran consultant Eric Tirlemont.

“The resignations create further upheaval as EY prepares to centralise control of its operations in 25 countries in a new Europe West region”, writes Financial Times’ Michael O’Dwyer “The overhaul has caused concern among French partners that they could be left financially exposed after the firm’s audit of Wirecard, the German fintech company that collapsed in a fraud scandal last year.” This quote confirms our assessment that EY’s auditors are experiencing an equity bottleneck.

Equity and equity ratio have been falling for years. The decline draws an almost straight line. Year after year, losses continue to consume the auditing firm’s equity. The consolidated financial statements of the German “Ernst & Young GmbH Wirtschaftsprüfungsgesellschaft” for the financial year from July 1st, 2018 to June 30th, 2019 are still the “most recent” financial statements published in the Federal Gazette.Until June 25th, 2020 there were still several additions to the publication in the Federal Gazette.While other leading accounting firms have already published their annual accounts, that of EY is still a long time coming.

“Some partners fear closer integration would force partners outside Germany to share the bill for possible fines, lawsuits or client losses”, says the article of Financial Times. The development of this company, one of the leading auditing firms, is relevant for credit rating agencies, as the continuing losses and the depletion of equity could increase the moral hazard.

Credit ratings can only be as good as the data on which they are based. If auditor’s reports were issued that would not have been issued under normal circumstances with a good equity base and satisfactory profit situation at the auditing company, this would also lead to wrong conclusions at the rating agencies.

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Court Ruling Makes Rating Difficult To Assess


Tesco and other UK grocers are affected.

On June 3, 2021, the Court of Justice of the European Union (ECJ) ruled that the provisions in EU law relating to comparability between two different roles based in different establishments, but within one organisation, do apply directly to private businesses in the UK and can be advanced under European and UK law. Moody’s comments on a decision which was prompted by the “equal pay” claims of around 6,000 former and current Tesco Plc employees and allows claimants to compare the value of their work to that of their colleagues in Tesco’s distribution centres.

“Assuming that Tesco could be forced to pay compensation and increase the pay of each of its 250,000 store workers by £10,000-£20,000 a year,” says Moody’s, “the implied increase in annual wages could be £2.5-£5.0 billion.” Such an amount could more than halve or even exceed Moody’s forecast of Tesco’s £4.2 billion Moody’s-adjusted EBITDA over the next 12-18 months.

“The company’s Baa3 rating and the stable outlook do not factor in any significant cash outflow related to the equal pay claims”, warns Moody’s. “Tesco has made no provision in its accounts on the basis that any potential liability is not considered probable by the company’s directors. Tesco’s leverage, measured in terms of Moody’s-adjusted gross debt to EBITDA, was around 4.4x in fiscal 2021 (ended 27 February) and we expect it will improve to around 3.8x within the next 12-18 months, compared to leverage guidance of 3.75x-4.5x for the Baa3 rating.”

Tesco’s rating is also by the other leading agencies, S&P’s and Fitch Ratings, just a notch above the speculative grades. Whether the company’s liabilities slide into the speculative realm depends on the behavior of the courts. The observation of the rating must therefore start here:

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Credit Rating Effects of the Global Minimum Tax


G7 Finance Ministers’ communiqué will most likely not bring any credit rating improvements for multinational corporations.

“We strongly support the efforts underway through the G20/OECD Inclusive Framework”, says the Finance Ministers and Central Bank Governors of the G7’s Communiqué, “to address the tax challenges arising from globalisation and the digitalisation of the economy and to adopt a global minimum tax.”

So far there are only a few details: “We commit to reaching an equitable solution on the allocation of taxing rights, with market countries awarded taxing rights on at least 20% of profit exceeding a 10% margin for the largest and most profitable multinational enterprises. We will provide for appropriate coordination between the application of the new international tax rules and the removal of all Digital Services Taxes, and other relevant similar measures, on all companies. We also commit to a global minimum tax of at least 15% on a country by country basis.”

With a view to the federal election in Germany and the responsibility of the Federal Minister of Finance, who is also the candidate for chancellor of what is currently the third largest party in Germany, the planned date for the implementation of the project should fall during the German election campaign phase: “We agree on the importance of progressing agreement in parallel on both Pillars and look forward to reaching an agreement at the July meeting of G20 Finance Ministers and Central Bank Governors.”

Higher tax revenues are among the hoped-for short-term benefits for the governments involved. For countries like the Federal Republic of Germany, the question arises whether there is an overall economic advantage, since Germany is one of the strongest exporting nations a large part of the added value of German companies is achieved abroad. Since the planned tax particularly affects the largest corporations, especially the technology groups, which are also monitored by the international rating agencies, the consequences for the current ratings must be analyzed. The new tax could change the structure of capital allocation as well as the legal structures.

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The following infographic uses OECD data to show the basic central government statutory (flat or top marginal) corporate income tax rate in a selection of countries. 

Infographic: Global Corporation Tax Levels In Perspective | Statista You will find more infographics at Statista
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Drawing Investors From More Than 100 Countries


MIntos introduced a new lending companies evaluation model, Mintos Risk Score.

At the onset of the COVID-19 pandemic, many existing investors at Mintos, one of Europe’s leading alternative investment platform for investing in loans, decided to abruptly halt or reduce their investing activity while they waited for a clearer economic outlook, writes AS Mintos Marketplace, a joint stock company registered in the Commercial Register of the Republic of Latvia: “Furthermore, the global downturn in 2020 led to a sharp increase in underperforming loans, many of which eventually ended up delinquent. Mintos was quick to react by creating and expanding teams within the company dedicated to loan recovery.”

“Despite these challenges,” reports Mintos CEO and co-founder Martins Sulte, “over 80% of the total funded portfolio sustained their strong performance and delivered a total €53.3 million in interest earnings to investors. This shows a significant increase of 18.9% when compared to the €45 million earned in 2019.”

In 2020, 128,380 new users joined Mintos, bringing the platform to a total number of 369,332 investors from 105 countries. And with an addition of €1.6 billion in loans funded in 2020, the cumulative volume of funded loans grew by 37.2% to reach €5.9 billion.

Despite market ups and downs, the Mintos team focused on continuous service improvements. In January a new lending companies evaluation model was introduced – Mintos Risk Score. To help investors make informed decisions about investing in loans, Mintos expresses findings with the Mintos Risk Score. The Mintos Risk Score is calculated from 4 subscores that they assign for the company’s loan portfolio performance, the efficiency of loan servicing, buyback strength, and legal setup between the lending company and Mintos.

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Management Board of the Auditing Association of German Banks​​ Changing


Former colleague of the later Greensill Bank Supervisory board member has left.

The Federal Association of German Banks (BdB) is drawing initial conclusions from the Greensill Bank‘s 3 billion euro compensation case. As the organization confirmed on request of the Börsen-Zeitung, it will analyze the structure of its auditing association and its staff with the help of consulting firms in the coming months. The aim is to reorganize the auditing association’s risk management system and develop its staff in such a way that a case like Greensill is not repeated. Bank President Hans-Walter Peters informed the staff of the auditing association about this, reports Börsen-Zeitung.

The reform announced by BdB President Peters, which also aims to digitize the auditing association, is likely to cost the association a single-digit million amount. ZEB and Deloitte are to advise the organization on developing a target image for a more agile auditing association, while headhunter Egon Zehnder will support them in personnel development and acquisition. First results are expected in early autumn.

A personnel change has already been determined, says Börsen-Zeitung: Manfred Kühnle, spokesman for the board of the 160-person auditing association, will probably take his hat around mid-month, it said. Internally, he has already said goodbye to employees, as can be heard. Hans-Dieter Bienen, who is changing from Deloitte, will initially take up his post on an interim basis.

Manfred Kühnle is an auditor by profession: 1983 – 1985 training as a banker, 1985 – 1986 military service, 1986 – 1992 study of business administration at the Friedrich-Alexander-Universität Erlangen-Nürnberg (Dipl. Kfm.), 1992 – 2002 PwC Deutsche Revision Aktiengesellschaft Wirtschaftsprüfungsgesellschaft, Frankfurt am Main (1997 tax consultant exam, 1999 auditor exam, 2001 Certified Public Accountant) and from 2003 Auditing Association of German Banks, Cologne (member of the board since 2004, spokesman for the board since 2009).

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Investment Grade Møller Mobility

Read, Reports

Møller Mobility thrives in symbiosis with Volkswagen.

Nordic Credit Rating (NCR) assigned a ‘BBB-‘ (that reads triple B minus) long-term issuer rating to Norway-based car importer and retailer Møller Mobility Group AS (Møller Mobility). The rating agency’s outlook for this credit rating is stable. At the same time NCR assigned an ‘N-1+’ (that reads N One plus) short-term issuer rating. NCR has also assigned ‘BBB-‘ (triple B minus) issue ratings to Møller Mobility’s senior unsecured bonds.

Nordic Credit Rating was established as a financial infrastructure company by 30 Nordic banks and institutions to lower the threshold for issuers to obtain and maintain a credit rating. Being registered with European Securities Markets Authority as a credit rating agency, their research is produced by an analytical team and is based on local expertise.

“The long-term rating reflects the company’s strong position in its core market. It is further supported by the company’s close relationship over almost 75 years with car manufacturer Volkswagen AG, which provides scale and diversification through a range of brands, and the joint venture Volkswagen Møller Car Finance. The rating is also underpinned by the company’s moderate financial leverage and strong cash position, supported by unutilised credit facilities”, is the rating agency’s rationale for this rating.

According to NCR, the rating is constrained by the company’s operating environment. It is a cyclical industry undergoing rapid change through the development of low-emissions vehicles, which could potentially affect the industry’s structure. “The company’s large off-balance-sheet repurchase portfolio, with a maturity profile of less than two years, could materially affect the company’s short-term liquidity and potentially result in losses should the market experience rapid deterioration”, warns NCR.

“The stable outlook reflects our expectation that Møller Mobility will maintain its market-leading position in its geographical segments and benefit from an economic recovery on the back of increased vaccination against COVID-19 and the easing of pandemic-related restrictions by mid-2021 in its core markets. It also reflects our expectation that Volkswagen will continue to deliver popular models of cars in a timely matter”, says NCR.

The rating agency sets the following standards for improving the rating (see also the Full Rating Report:

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After S&P Global, Also Moody’s on Fortune 500


The two leading rating agencies in the world are among the 500 largest companies in the USA.

Anyone who thinks the rating agencies industry is a marginal issue should study the Fortune 500 list. Moody’s Corporation has been named to the Fortune 500 for the first time, reflecting the strength and momentum of its strategy as a global integrated risk assessment firm and the resilience of its global employee base.

The Fortune 500 is an annual list compiled and published by Fortune magazine that ranks 500 of the largest United States corporations by total revenue for their respective fiscal years. The name of the Fortune 500 ranking is synonymous with business success. Now there is the 67th edition of the ranking of America’s largest companies. Together, the 500 corporations on this year’s list generated $13.8 trillion in revenue, or some two-thirds of the U.S. economy.

When Gabler Verlag published the first book in German on the subject of “Credit Rating by International Agencies” exactly 30 years ago, hardly anyone would have thought that a relatively small organization of analysts would make it into this prestigious ranking. The book by Gabler Verlag was based on the publication of the first doctoral thesis in German on this topic. A central theme of this book was the controversial forecast that the two leading rating agencies Moody’s and Standard & Poor’s would gain in importance worldwide. What was a controversial prognosis at the time is a provable fact today.

“Moody’s achieved record revenue growth in 2020, in part because we never wavered in our support for each other and because we stayed focused on providing expertise to our customers when they needed it most,” said Rob Fauber, President & CEO of Moody’s. “Our inclusion in the Fortune 500 recognizes the contribution of our employees in achieving these results – even during challenging times – and I am deeply grateful for their dedication.”

Moody’s generated $5.4 billion in revenue in 2020, due in large part to strong market demand for Moody’s data, analytics, and trusted insights during the COVID-19 pandemic. Recognition in the Fortune 500 reflects the clarity of Moody’s strategic direction and its growth during a period of unprecedented market turbulence.

Building on the heritage of the rating agency, Moody’s Investors Service, in 2007 Moody’s launched Moody’s Analytics to further build the firm’s data and analytical capabilities, serving a broader range of customers to help them make better decisions about a wider range of risks.

While Moody’s made it onto this list of success for the first time, competitor S&P Global is already on a higher rank. Dealing in financial information and analytics, S&P Global is the parent company of subsidiaries such as S&P Global Ratings and S&P Global Market Intelligence. The company also owns a majority stake in the S&P Dow Jones Indices. Therefore, these two companies on the Fortune 500 list are not fully comparable. Moody’s rank is 500, S&P Global’s rank is 393.

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Automation Of The Guarantee And Deposit Processes


E-Cautio, a Luxembourg-based InsurTech company and provider of Platform-as-a-Service (PaaS) solutions, announced its new partnership with SCHUMANN.

In the future, E-Cautio will use the CAM Surety software from SCHUMANN, the technology provider in the areas of credit and guarantee insurance. With CAM Surety, a SaaS solution, E-Cautio enables small and medium-sized companies to remain competitive by digitizing the entire process of guarantees and deposits and to offer guarantee insurance as a SaaS solution.

By automating the entire process of warranties and sureties such as performance guarantees or completion guarantees, small and medium-sized enterprises in Luxembourg and the rest of Europe accelerate their digital transformation. “They significantly improve the quality and efficiency of their operations, while at the same time reducing the risk of human error. In addition, the digital process includes customer onboarding, KYC, risk analysis, customer and claims management”, says a press release of SCHUMANN.

The new strategic partnership combines the CAM Surety software from SCHUMANN with the market expertise of E-Cautio. Small and medium-sized businesses – from MGAs (Managing General Agents) to insurance brokers to insurance companies and banks can be equipped with efficient, state-of-the-art technology tools. In a sector that demands ever more operational agility and efficiency, companies are supported to be innovative and to grow.

The Role of Ratings in Greenwashing

Agencies, Criteria, Read

Austria’s Financial Market Authority (FMA) warns consumers against “greenwashing” in the new edition of their consumer information series “Let’s talk about money”.

“Greenwashing” means that a financial product is advertised as environmentally friendly, green or sustainable – i.e. colored green – even though it does not actually meet these standards. In this way, potential investors are to be tempted to make investments that they would not have made or would only have made at a different price with knowledge of the actual effects of the financial product.

“Greenwashing” is carried out in particular through misleading or false information in advertising, consultations and product documentation. It is often associated with a corresponding optical design, for example through the use of the color green and through representations of unspoiled nature.

Furthermore, terms such as “ecological” or “green” are often used, or a certification that does not even exist is advertised, reports the FMA. The FMA report could be supplemented by a warning about sustainability ratings that were either developed in a fast-track process and thus ignoring a number of important aspects, or even applied without any technical expertise.

Environmental, Social, and Corporate Governance (ESG) refers to the three central factors in measuring the sustainability and societal impact of an investment in a company or business. Some rating agencies are providing investors with its ESG analysis through a digital platform, comprising more than 1,600 companies in the MSCI world stock market index. They claim to have methodology that is applicable to the whole universe of corporates, from small and medium-sized companies to large listed multinational enterprises.

Such claims are a clear indication that the complexity of the analysis is being underestimated, especially when a team of analysts who is only very small in relation to the number of companies assessed and overwhelmed by the size of the task is involved in the acquisition and evaluation of the data.

Therefore, investors should heed the regulatory warnings: “Sustainable investments are not per se safer than comparable conventional investments. Always ask questions and be critical,” warns the FMA Board of Directors, Helmut Ettl and Eduard Müller. Particular caution is required on the so-called “gray capital market”, that is, the unregulated capital market.

Investments in “green real estate”, wind and solar parks or hydropower plants are often offered in the “gray capital market”. If such projects are designed as qualified subordinated loans, company investments, bonds or profit participation rights, one should be aware that if the company becomes insolvent, all the money invested can be lost.

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Two Are On The Supervisory Board Of Greensill Bank. Then Why Scope Ratings And Not GBB-Rating?


A Complicated Choice Between Conflicts of Interest.

The rating of an independent credit rating agency is a valuable source of information also for the supervisory board of a company, especially for the supervisory board of a bank. The thoroughness of the analysis by credit rating analysts helps to understand the external view onto the company or onto the bank and to follow up on indications that work towards a deterioration in creditworthiness.

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Scope’s Greensill Bank Rating Tragedy

Agencies, Authorities, Governance, Read, Regulations

The Federal Financial Supervisory Authority (BaFin) filed criminal charges Against The Bank’s Board Members.

The Federal Financial Supervisory Authority (BaFin) in Germany received monthly reports from Greensill Bank AG (Greensill Bank) about the bank’s balance sheet data from January 2019 on. This is evident from the answer given by Parliamentary State Secretary Sarah Ryglewski on March 12, 2021 to written questions from members of the German Bundestag (Drucksache 19/27704). Greensill Bank’s total assets increased rapidly in 2019 from EUR 763 million at the beginning to EUR 3.8 billion.

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On March 3, 2021, BaFin finally issued a ban on the sale and payment of the bank due to the threat of over-indebtedness. The bank had to close for business with customers. BaFin prohibited it from accepting payments that were not intended to repay debts to the bank (moratorium). In addition, the BaFin filed criminal charges against the board members of Greensill Bank.


Experts, Read


A sustainability report provides information on an organization’s health, including economic, environmental, and social performance against set guidelines or an established framework. Over the past few decades, business performance is increasingly being approached from a multi-dimensional perspective. This is because a pro-active corporate sustainability reporting system for assessing the performance of an organization should address impacts within and beyond the organization on stakeholders, including  the host community, supply chain actors and resulting or associated impacts on people, planet and profits.

The reporting of the business implication of climate change in sustainability reporting becomes even more significant as we celebrate Earth day on April 22nd. The potential financial implications of climate change are receiving increasing attention and recognition, with investors and other stakeholders encouraging companies to identify, assess and report publicly on the financial implications of climate change on their businesses.

This is evident in numerous forums and initiatives, for example the Carbon Disclosure Project (CDP) and Institutional Investor Group on Climate Change (IIGCC) and other initiatives of the World Economic Forum (WEF). With the Increasing public awareness and concern, taking action on climate change is also starting to become a reputational and strategic issue for companies. This then behoves on organizations to be intentional about ensuring the Sustainability reporting is all encompassing. 

In other words, sustainability reporting is an instrument capable of helping companies become aware of their strengths and weaknesses, better manage corporate risk, improve regulatory compliance, innovate and identify potential synergies and interdependencies across their value chain and supply chain. 

The Nigerian Corporate Governance Code includes a comprehensive section on sustainability, and requires that Boards “establish policies and practices regarding its social, ethical, safety, working conditions, health and environmental responsibilities as well as policies addressing corruption.” Boards are also responsible to monitor the implementation of these policies. Sustainability also takes the form of “ESG Ratings”, “Circular Economy Initiatives” and “Integrated Reports”, which introduce environmental, social and governance KPIs to enhance the positive impact that companies have on society. Specifically, the Institute of Directors Nigeria and Afrikairos have been involved in advocating for the adoption of sustainability reporting, and the operationalization of sustainability across business functions, as a core part of the tenets  for good corporate governance. 

With sustainability becoming more institutionalized as part of the corporate governance best practices, and with the Institute of DIrectors (IoD) Nigeria having a significant role to play to raise awareness and build the capacity of its members and non-members to set high standards for sustainability governance in Nigeria, the Institute has partnered with Afrikairos GmbH, supported by Circular Economy Innovation Partnership (CEIP) and Growing Businesses Foundation (GBF), to bring together corporate Nigeria and relevant regulators in a half-day stakeholder workshop. The aim is to provide insight into levels of adoption, interests as well as capabilities within corporate organizations on sustainability reporting. This webinar introduces a range of perspectives on sustainability , circular economy, ESG Ratings and Integrated Reporting and paves the way for a series of future workshops to be delivered by IoD and Afrikairos in Q3, 2021.

Learning Objectives

  • To introduce, identify global trends and emphasize the importance of sustainability reporting, circular economy, integrated reporting and ESG Ratings to Nigerian corporates and corporate governance.
  • To provide tools for directors to meet their sustainability responsibilities
  • To explore how sustainability reporting can be useful to build organizational resilience 
  • To gain insight on the requirements and benefits of sustainability reporting
  • To understand the level of adoption of sustainability reporting by stakeholders in Nigeria 
  • To gain insight on board practice of sustainability reporting: lessons from domestic and international perspectives 
  • To be able to apply concepts of sustainable reporting to address sustainability challenges in organisations
  • To be able to identify, act on, and evaluate professional and personal actions with the knowledge and appreciation of interconnections among economic, environmental, and social perspectives
  • To have a deeper understanding of social responsibility and impact, both as directors and citizens
  • To be able to embrace and improve sustainability and business performance
  • To be able to motivate and engage directors and management towards adopting sustainability reporting and ESG Ratings

Target Audience/Participants

  • Chairmen, CEOs, COOs, Executive and Non-Executive Directors 
  • Company Secretaries, Chief Regulatory Officers and Legal Heads
  • Chief Financial Officers (CFOs), Chief Value Officers  and Heads of Audits & Compliance
  • Chief Human Resource Officers, Chief Marketing /Sales Officers
  • Corporate Affairs Executives and Head of Foundations
  • Sustainability Executives and Heads of Risk/Compliance, etc.
  • CEOs of Supply Chain companies to sustainability-driven corporates

Program Structure and Agenda


Stakeholder Workshop on Operationalizing Sustainability & Circular Economy: Measuring, Monitoring, Reporting, Impact Investing, ESG Ratings.

Date:   Thursday, April 22, 2021 

Time:   3pm-7pm

Venue:   Zoom (Registration link to be provided) 

Expected no. of Participants:  600 participants (Members & Non-Members)

Program Agenda

3pm – 6.30pm

15.00 – 15.05Opening Remarks Moderator/Host:
Dr Ndidi Nnoli-Edozien
Partner, Afrikairos & Chair, Circular Economy Innovation Partnership, Growing Businesses Group
15.05 – 15.15Welcome SpeechChief
Chris O. Okunowo
F.IoD, President/Chairman of Council, IoD Nigeria
15.15 – 15.45Goodwill MessagesDr Dolapo Fasawe
DG Lagos State Environmental Protection Agency (LASEPA)
Saeeda Sabah Rashid
Lead Governance Specialist, World Bank, Nigeria
Prof K. Amaeshi
University of Edinburgh/President, Association of Sustainability Professionals, Nigeria
Iheanyi Anyahara, PhD
FCAActing Executive Secretary/CEO Financial Reporting Council of Nigeria
Dr Innocent Okwuosa 
Chairman, Nigerian Integrated Reporting Committee 
Dr Innocent Onah
Climate & Green Growth Expert, AfDB; Coordinator, Nigeria Circular Economy Working Group

Session I (Corporate Perspective)
15.45 – 15.55Keynote AddressOscar Onyema
DG/CEO, Nigerian Stock Exchange (NSE)
15.55 – 16.55Panel Discussion
Panelist-1Uto Ukpanah 
Company Secretary, MTN Nigeria Communications Plc
Panelist-2Eunice Sampson 
GM/Head, Sustainability, Dangote Cement Plc 
Panelist-3Amaka Onyemelukwe
Director, Public Affairs, Communications and Sustainability, Coca-Cola Nigeria
Panelist-4Omobolanle Victor-Laniyan
Head of Sustainability, Access Bank Plc.
Panelist-5Doerte Weidig
Panelist-6Clem Ugorji
CEO, Circularium Africa Advisory
Session II (Investors’ Perspective)
16.55 – 17.05Keynote AddressPatrick Kabuya
Convener, Africa Integrated Reporting Council, Senior Governance Specialist, World Bank.
17.05 – 18.05 Panel Discussion
Panelist-1Kola Aina
General Partner, Ventures Platform
Panelist-2Agharese Onaghise
Executive Secretary/CEO, Food and Beverages Recycling Alliance (FBRA)
Panelist-3Dr Oliver Everling
CEO Rating Evidence, GmBH, Europe 
Panelist-4Benedikt Hoffmann
Managing Partner, Afrikairos
Panelist-5Gerritt Ledderhof
Team Lead, Climate and Responsible Investment, Aegon Asset Management, Netherlands
Panelist – 6Folashade Ambrose-Mebedem
Rising Tide Africa, Sustainable Development Director, Lafarge
18.05 -18.25Comments, Questions and Answers (coordination of chatroom)Dr Natalie Beinsich
Way forward
18.25 -18.30Prof Nat Ofo
F.IoD, Chairman, Research & Advocacy Committee, IoD Nigeria
18.30 – 18.35Saeeda Sabah Rashid
World Bank Representative
18.35 -18.40Prof Kenneth Amaeshi
Chair in Business and Sustainable Development, University of Edinburgh
18.40- 18.45Prof Chukwumerije Okereke
Professor of Environment and Development in the Global Development Research Division and Department of Geography and Environmental Science at the University of Reading, United Kingdom
18.45- 18.50Prof Serge Miranda
Professor of Computer Science at the University of Nice Sophia-Antipolis, France
18.50 – 18.55Dr Ndidi Nnoli-Edozien
Partner, Afrikairos & Chair Circular Economy Innovation Partnership
18.55 -19.00Closing Remarks/ Vote of ThanksDele Alimi
M.IoD Director General/CEO, IoD Nigeria
white and orange gasoline nozzle

The Key to E-Mobility Lies at the DEFAMA Locations


In DEFAMA’s way, customers can quickly and conveniently charge their vehicle while shopping.

Together with DEFAMA Deutsche Fachmarkt AG, the energy company EnBW is further expanding the fast charging infrastructure in Germany. The partners aim at letting this happen where customers need it most in everyday life: at retail locations and specialist market centers.

EnBW is equipping three pilot locations of the real estate company DEFAMA with up to eight high-power charging points (HPC) each. With an output of up to 300 kilowatts (kW), these enable charging for a range of 100 kilometers in just five minutes, depending on the vehicle’s equipment. In the medium term, EnBW wants to equip around 30 highly frequented DEFAMA locations with charging stations.

DEFAMA’s portfolio primarily includes locations in small and medium-sized cities in northern and eastern Germany. Even in rural areas, where there are often fewer charging options than in urban areas, fast charging points suitable for everyday use are required when shopping. The expansion of the charging infrastructure at DEFAMA’s properties thus consolidates the nationwide fast charging network in the area.

“Especially in smaller towns, charging infrastructure is a locational advantage for retailers. The possibility of being able to charge the electric car while shopping increases the attractiveness of our retail parks. Our tenants benefit from this,” says Matthias Schrade, DEFAMA board member. “With EnBW, we have an experienced partner at our side,” Schrade continues.

With the partnership, the north and east of Germany in particular benefit from a denser range of fast charging options in the EnBW HyperNetz. “For the mobility turnaround to succeed, e-mobility must also assert itself where the car is the number one means of transport: in the smaller towns and communities, beyond the urban conurbations,” explains Timo Sillober, Chief Sales and Operations Officer at EnBW.

“Here, too, charging has to fit seamlessly into everyday life and very few people can charge at home. We are creating the appropriate public fast-charging infrastructure for this. It is our goal to enable electric car drivers to charge where they are and where the need actually arises. This is often the case in retail, because the loading times of the cars are optimally matched to the shopping time. The partnership with DEFAMA helps us to start right here.”

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Statistical Significance of the A- Issuer Rating for Greensill Bank

Agencies, Statistics, Symbols

Instead of a low default risk, other reasons may have been decisive for the issuance of the extraordinarily good issuer rating.

Usually the question of whether a credit rating is right or wrong cannot simply be answered with yes or no. Only a few cases on the capital market are so-called nobrainers, which would immediately reveal a mistake. The occurrence of bankruptcy or default despite a good credit rating is by no means proof that the rating was wrong. Scientifically, the proof can only be made on the basis of the assumption of a certain distribution using a hypothesis test. Usually this requires a comparatively large number of cases. This is especially true when the probability of the occurrence of the event to be tested is very low.

According to the central limit theorem of statistics, the more cases can be observed, the more accurate the result. In probability theory, the central limit theorem establishes that, in many situations, when independent random variables are added, their properly normalized sum tends toward a normal distribution even if the original variables themselves are not normally distributed. The Scope Ratings scandal surrounding the issuer rating of the Greensill Bank can also be analyzed from this point of view.

At the time of Scope Ratings’ first isser rating on Greensill Bank AG on July 19, 2019, the bank was a German factoring bank based in Bremen. The bank was a 100% subsidiary of privately held Greensill Capital Pty Ltd (“Greensill”). The rating of Greensill Bank allegedly reflected the bank’s capitalisation and its high degree of integration with the Greensill group. The assets of Greensill Bank consisted predominantly of trade receivables from factoring and reverse factoring transactions originated by the Greensill group. The Greensill group had grown strongly in recent years, competing with major global banks as a specialised non-bank provider of supply chain finance (“SCF”). “The group had also attracted more than US$ 1 billion external investment”, admitted Scope Ratings.

Scope Ratings’ Issuer Rating for Greensill Bank AG

The following credit rating was assigned by Scope Ratings on July 19, 2019: “Issuer Rating of A-. The rating has a Stable Outlook.”

A number of Scope Ratings’ credit rating methodologies for various sectors make reference to Scope Ratings’ idealised expected loss and default probability tables. These tables are provided at the discretion of Scope Ratings. “Users of these tables should refer to Scope Ratings’ specific Credit Rating Methodologies to ensure all analytical considerations are addressed. These tables should only be used in conjunction with such Credit Rating Methodologies”, warns Scope Ratings:

Please refer to the original source: Scope Idealised Tables

Such tables are required for carrying out ratings in the area of structured finance. An explanation of these tables was also published in the year of the publication of the issuer rating for Greensill Bank (see Scope Ratings’ document “Idealised expected loss and default probability tables explained”).

When deriving the table, Scope Ratings uses data from the leading US credit rating agencies. However, there is still no evidence as to whether the conditions of these credit rating agencies with their experience of an entire century can also be transferred to the credit ratings of Scope Ratings.

This is not actual historical data. Rather, the tables are intended to help the investor understand the risk associated with a particular rating level. Scope’s idealised default probability table shows the maximum default probability reference that is generally consistent with a given rating level over a given risk horizon. The risk horizon is expressed in years.

Ratings are the universal expression for risk over a specific time horizon. Accordingly, with the issuer rating of A- given for the Greensill Bank, the investor could expect that issuers assessed in this way are on average after 30 years with a probability of 12.65 % in default. In other words, one eighth of the banks rated at this level are in financial difficulties after 30 years.

In the short term, however, the risk should be much lower than the risk after three decades. This is also shown consistently in Scope Ratings’ idealized table. Within two years the probability should only be 0.16 percent.

Scope Ratings had downgraded the issuer ratings from A- to BBB+ on Greensill Bank on September 17, 2020. Half a year before the default occurred, creditors could assume a very good risk, especially since the downgraded rating was still clearly in the investment grade range. In this respect, the following calculations could be carried out with the even lower risk of 0.07 percent resulting from the table above.

Scope Ratings’ idealised default probability table illustrates the default probability reference generally consistent with a given rating level over a given risk horizon.

How low the short-term probability of a failure should be under these conditions cannot be intuitively grasped by looking at the graph or at the table above. To calculate the number of banks among which one single bank defaults when the probability of default for each A- rated bank of the group of A- rated banks is 0.16 percent, you divide 100 by 0.16% or 1 by 0.0016. This calculation results in the number 625.

According to Scope Ratings A- rating for Greensill Bank and taking into account the idealized default rates used in Structured Finance, the probability of the Greensill Bank failing within two years should be 1 in 625 (= 0.16 %).

Calculations carried out with the even lower risk of 0.07%, if you take into account the fact that at the beginning of September 2020 an investor could only see an issuer rating of A- for the Greensill Bank on the website of Scope Ratings, the probability of the Greensill Bank failing within the following year should be 1 in 1.429 (= 0.07 %). Regardless of the assumption made with regard to the time horizon, the default probability was given as very low and therefore the A- issuer rating had to encourage investors to take the risk.

It is according to Scope Ratings’ A- Issuer Rating for Greensill Bank highly unlikely that Greensill Bank, the bank of the shareholder and member of the advisory board of Scope, who is also chairman of Greensill Bank’s supervisory board, would default after only two years. Therefore it cannot be ruled out that reasons other than the actual credit risk of default were decisive for the provision of this remarkable good issuer rating for Greensill Bank.

ancient architecture archway building

Clever Commission From the City of Münster in Westphalia

Agencies, Analysts, Authorities, Experts

An automated safety net for municipal investments has not existed since 2017.

If municipalities do not want to set up extensive bond research departments themselves, in which financial analysts examine thousands of qualitative data and annual financial statements from issuers of financial products, the municipalities depend on the independent judgments of reliable credit rating agencies and specialists. The scandal of the Berlin rating agency Scope around the Greensill Bank in Bremen shows the billions in consequences of an embellished credit rating (see Börsen-Zeitung).

The city of Münster in Westphalia did not rely on the judgment of a rating agency registered in the European Union – the process in itself is a disgrace not only for the local rating agency Scope Ratings in Berlin, but also for the European Securities and Markets Authority in Paris, because far away in Paris are the supervisors, who already had internal compliance reports, transparency reports and notifications about the processes in Berlin. There was no lack of information.

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Relatives Are Relative

Agencies, Whistleblowing

The scandal with the Greensill Bank brings back earlier scandals by the same rating agency to mind.

How close can relationships be without being a problem for the rating and for the rating agency? What degree of kinship could influence the independence of judgment?

The story of the fund initiator Interlife Management GmbH seems like a penny dreadful: The company belonged to the father of the business scheme initiator and major shareholder of today’s Scope SE & Co. KGaA. Scope not only gave the first Interlife fund a good rating: A company owned by Scope manager Martin Passenheim took over sales. Ratings with a bitter aftertaste are not a recent phenomenon, but part of the gene code of this rating agency.

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human teeth

Scope Ratings Game of Corporate Law

Agencies, Authorities, Whistleblowing

The “Scope Group” is a bunch of constant changes under company law.

As a result of the Scope Ratings GmbH billion Euro scandal about Greensill Bank in Bermen, which was rated as “investment grade” for the first time in 2019 and is now insolvent, the precise activities of this local rating agency in Berlin have gained public attention. Therefore, the background to the recent Berlin takeover of Euler Hermes Rating GmbH (EHRG) is being researched.

The world-famous brand name “Euler Hermes” was not acquired by Scope. Even back then, when Scope took over FERI EuroRating Services AG, a credit rating agency registered by the European Securities and Markets Authority (ESMA) and headquartered in Bad Homburg, on August 1, 2016, Scope did not care about continuing the good name of the acquired credit rating agency.

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Rating Technology

Read, Technology

Rating technology is the collection of techniques, skills, methods, and processes used in the production of rating services or in the accomplishment of rating objectives.

Rating technology comprises the knowledge of techniques, processes, and the like, and can be embedded in computers to allow for operation without detailed knowledge of their workings, for example in the case of articial intelligence. Rating systems applying technology by taking an input, changing it according to the rating system’s use and model, and then producing an outcome in the form of rating symbols are referred to as rating technology or technological rating systems.

The simplest form of rating technology is the development and use of basic tools. The printing press, the telephone, and finally the internet, have lessened physical barriers to communication and allowed decision makers to interact freely on a global scale, making use of most advanced rating technology, processing data in unprecedented quantities.

Technology has many effects. It has helped develop more advanced economies and has allowed the rise of a new profile of rating analysts. Innovations have always influenced the values of a society and raised new questions in the ethics of technology. Examples include the rise of the notion of efficiency in terms of human productivity, and the challenges of social credit systems.

Philosophical and political debates have arisen over the use of rating technology, with disagreements over whether rating technology used for social credit systems improves the human condition or worsens it. Some movements criticize the pervasiveness of social rating technology such as commonplace webcams and surveillance cameras, arguing that it alienates people. Proponents of social credit systems view continued technological progress as beneficial to society and the civilization.

fabric with abstract ornaments and sequins

Comparing Art on One Platform


In response to the Corona restrictions for museums, art associations and galleries, bpar has established a central platform for specially digital art events with bpar.DIGITAL. It is a project of Beisel Public Art Relations, an initiative of Healthcom GmbH.

Museums, art associations, galleries and collections can upload their digital art formats there free of charge. The virtual tours and guided tours, artist talks, videos and podcasts are not only aimed at art enthusiasts and collectors. In addition, the free offer aims to facilitate access to a wide range of digital art offers for a broad target group, especially under the difficult pandemic conditions.

bpar.DIGITAL is a private initiative – with the intention of promoting the visual arts and culture and bringing them closer to a broad public via digital channels.

photo of female engineer designing an equipment

TELOS ESG Fund Check Professional Launched


An engine room of ESG fund management is in the making.

EccoWorks GmbH, known in Germany for their sustainability consulting, and the long-standing specialist for fund ratings in the institutional sector, TELOS GmbH, have bundled their know-how in the field of sustainability to develop an ESG fund rating product as part of a cooperation.

The “TELOS ESG Fund Check Professional” rating product developed in the course of the cooperation is supposed to support professional investors in finding suitable asset managers who are qualified in the field of sustainability. With the help of the ESG rating offered at fund level, institutional investors, for example, can gain confidence that the managers they hire have the necessary experience and qualifications to integrate ESG within the funds they offer.

With an innovative approach, the focus is on the “engine room of fund management” and rounded off by an analysis of the fund’s financial performance. “The integrated rating based on qualitative and quantitative factors as well as the addressing of institutional investors clearly distinguishes us from other ESG fund ratings on the market”, emphasizes Prof. Dr. Henry Schäfer, managing partner of EccoWorks GmbH.

The TELOS ESG Fund Check Professional aims at all asset classes, including liquid as well as illiquid assets. Areas of investigation are the integration of ESG criteria within the investment approach itself, among other things, quality management as well as the responsible fund manager or the team behind the fund and their embedding in networks. The knowledge gained in the rating process is summarized in a meaningful certificate and the rating (platinum / gold / silver …) is also summarized in a rating seal and thus made transparent to the market and thus to investors. The fund management also receives a strengths / weaknesses analysis.

With the TELOS ESG Fund Check Professional, the two partners also want to build a bridge between asset managers and professional investors.

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Requirements Relating to Press Releases or Reports

News, Read, Reports

The text of publications must meet strict requirements.

The European Securities and Markets Authority considers that a credit rating or rating outlook should be accompanied by a press release or report. The press release or report should explain the key elements underlying the credit rating or rating outlook.

At least the following elements should be included::

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Where it would be disproportionate in length to include the full underlying detail of the above elements in the press release or report accompanying the credit rating or rating outlook, the European Securities and Markets Authority expects that credit rating agencies make clear and prominent reference where this underlying detail can be directly and easily accessed through direct web-link. Notwithstanding this, the Authority considers that the inclusion of the core of the above elements in the press release or report is necessary and proportionate to the overall length of the press release or report.

Monarchs or The Pope Are Not a Role Model for China


Many western states do not give China a good role model for further developing the political system.

All leading rating agencies – FitchRatings, S&P, DBRS Morningstar – give the People’s Republic of China a credit rating of A+ or A1. Moody’s credit profile of China (issuer rating A1) is supported by the country’s “a1” economic strength, but also – among other factors – drawn down by the country’s “baa” susceptibility to event risk, driven by risks posed by the banking sector, as well as by external vulnerability risk and political risk due to geopolitical tail risks.

However, many countries with better credit ratings, AAA or AA, do not offer the People’s Republic of China any examples to emulate. Only in kingdoms are there people who are granted a special position in politics and society at birth. In China, too, children of influential politics certainly have advantages in life. But these advantages are not guaranteed by the constitution or law, as in Western and Japanese monarchies: An unacceptable idea for the Chinese.

Absolute and semi-constitutional monarchies are most common today on the Arabian Peninsula, even though Morocco, Brunei, Eswatini and Liechtenstein also count among them. Semi-constitutionalism – where monarchs and elected representatives share powers – ranges from countries which let monarchs retain some powers next to an elected parliament to so-called elective monarchies, which elect leaders from a group of royals – the governing system of the United Arab Emirates. The Pope is also elected from a group of Cardinals, but he is the singular ruler over the Vatican, therefore considered an absolute monarchy.

Infographic: The World's Monarchies | Statista You will find more infographics at Statista

Internet Oligopoly is Hindering Online Retail Growth


China strengthens small and medium-sized enterprises.

On 5 March 2021, the Government of China (rated A1 stable by Moody’s) said it will encourage internet companies to reduce commissions to an appropriate level for merchants that transact on these internet companies’ platforms. “The government did not specify the level of potential commission reduction in its directive,” writes Moody’s in its report, “and is likely to gauge its effectiveness in terms of expanding market access.”

The instruction aims to boost migration of goods sales and services to online platforms and forms an integral part of the government’s economic development. This shift of business to online platforms has multiple consequences, including the security of business and the stability of social relationships in China. A social credit system can only function effectively if as many, if not all, transactions by citizens as possible are recorded in real time.

Moody’s sees that Internet companies have strong buffers against near-term challenges: “Most have strong financial profiles and good access to funding, which will help them navigate near-term business fluctuations.”

However, the immediate effects are initially negative, as Moody’s writes: “This directive is credit negative for internet companies because it could stall revenue growth and earnings growth. Companies such as Alibaba Group Holding Limited (A1 stable),, Inc. (Baa1 stable), Vipshop Holdings Limited (Baa1 stable) and Meituan (Baa3 stable) derive a substantial portion of revenue from merchant commissions, which are fees they charge merchants that transact market products and services on internet platforms.”

A team from Moody’s Investors Service has been digging deep into the consequences: Ying Wang, VP-Senior Analyst, Lina Choi, Senior Vice President, Chi Kit Edward Lam, Associate Analyst, Clement Wong, Associate Managing Director: “We project that rated Chinese internet companies will grow revenue 15%-20% and EBITDA 10%-15% in 2021, largely similar to the growth rates in 2020 despite the economic recovery in China this year.”

An increasing number of merchants will provide goods and services, especially smaller merchants that have been previously prohibited by high commission charges and the market for online retail and services will broaden over time, stimulate merchant growth and support sector growth in the long term, expects Moody’s.

white ceramic sculpture with black face mask

Guard the Livinguard


Face masks change the appearance of people, but also of companies.

The corona pandemic made many managers really familiar with video conferencing technologies. But it is still unusual when a member of the board of directors of a stock corporation gives its long-awaited lecture in front of around 70 participants from his moving car. He is also available for questions and answers – until a dead zone literally leaves the participants in the dark. “Antiviral face masks: How a start-up stirs up the world market” is the topic of this event.

Unusual entrepreneurs have unusual stories to tell. So the appearance described by Sanjeev Swamy, Chief Technology Officer of the spectacular Livinguard AG, which is based in Bahnhofstrasse in the Swiss city of Zug, fits the company’s claim. He raised money from KKR for his company.

“I first conceived of the Livinguard technology in 2010 when posed with an interesting technical challenge from a British Brigadier General friend. Since then, my partners and colleagues who have joined this journey have taken this technology beyond what I could have imagined back then. I am deeply humbled by our unique ability to help people and our planet today, and this couldn’t have been possible without years of learning from failure”, says Sanjeev Swamy.

There have been enough setbacks in the life of the Indian and now Switzerland fan. Sanjeev Swamy, born in 1961, has already experienced a lot. He reports that a factory in India burned down completely and he is still waiting for the insurance money. For him, other economic tragedies are not only associated with Douceur Sportswear Mgf. Co. Pvt. Ltd. in Mumbai, India, but also in Germany with Douceur Brands Germany GmbH, HUCKE BERLIN GmbH, BUSCH Fashion GmbH, Whoopi Fashion GmbH or Douceur Retail GmbH.

With his new attempt, Livinguard AG, Sanjeev Swamy is once again combining his technical ideas with experience from the textile industry. “The Livinguard technology has been scientifically proven to destroy >99.9% of SARS-CoV-2,” enthuses Sanjeev Swamy.

Secured Income by Securing Deposits

Agencies, Clients, Regulations

The system of deposit insurance in the private banking industry makes GBB-Rating almost indispensable.

Cologne-based GBB-Rating, a company of the Auditing Association of German Banks, offers credit ratings with a price / performance ratio challenging its US peers. It is approved by the European Supervisory Authorities (ESAs) as an External Credit Assessment Institution (ECAI) for commissioned and unsolicited ratings for the calculation of capital requirements according to BASEL III / IV, CRR and Solvency II Directive. GBB-Rating is supervised by the European Securities and Markets Authority (ESMA) in Paris, which is responsible for all credit rating agencies in the European Union (EU).

The following graphic shows how GBB-Rating (i.e. GBB-Rating Gesellschaft für Bonitätsbeurteilung mbH) is embedded in the relationships between the associations and their subsidiaries:

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The following graph shows active relations and historic relations of managing directors, authorized officers, shareholders and the number of ative or historic relations to other companies:

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Since 1996, GBB-Rating has been active on the German market and increasingly also internationally in other European countries for ratings and credit assessments. With more than 20 rating analysts and around 220 ratings and benchmarking of financial services institutions every year, GBB-Rating is one of the local agencies in Germany and Europe. In the 2018 financial year, an average of 35 employees – excluding managing directors – were employed. The focus of their work is in the financial services sector with particular expertise in assessing banks, building societies and leasing companies. They have also been offering Pfandbrief ratings since 2020.

Assigned ratings and rating reports provide a decision-making basis for management and shareholders, a strengths / weaknesses analysis as a basis for determining the position, starting points for improving opportunity / risk management and monitoring the success and risk factors. The credit rating serves as a negotiating argument for business and refinancing partners as well as an image-promoting marketing tool.

Medium-sized and smaller leasing companies in particular can benefit from a recognized rating when opening up new sources of refinancing at credit institutions and, if necessary, realize advantages or savings potential in the (future) calculation of equity requirements (“leasing risk weight”) through more favorable risk weights.

GBB-Rating offers many years of expertise in the development, backtesting and validation of risk classification procedures (scoring) and data analysis and methodological support for risk management.

Among their services are:

  • Credit assessments: Drawing on many years of experience, detailed knowledge of the relevant processes and risk systems within enterprises, and of clients’ industry and company-specific requirements, GBB-Rating has originated a series of customized rating procedures. Credit assessments focus on banks, building societies, leasing companies and SMEs.
  • Review and validation of risk classifications: The independent support in the review of rating and scoring models in accordance with the requirements for risk classification procedures (MaRisk AT 4.1), quantitative and qualitative validation of the stability, selectivity and failure probability of the models and processes used.
  • Development of risk classification procedures: Development and implementation of individually optimized score cards and rating models as part of risk classification procedures in accordance with MaRisk BTO 1.4.
  • Data analysis: Well-founded portfolio and benchmark analyzes to support decision-making, implementation of various data analyzes to increase transparency and to optimize overall bank management
  • Technical support for risk management: The GBB platform is a tailor-made system solution for optimized information, credit management and credit assessment processes.
  • Service provider for deposit insurance schemes: In addition to designing and supporting the implementation of risk-based contribution systems, GBB also offers backtesting and validation. The design of early warning indicators (e.g. traffic light system, stress tests, reporting, benchmarking) is also one of their areas of responsibility.

Funds are maintained by the banks in such a way that all banks belonging to the deposit protection fund pay in a certain amount annually. The contribution to be made by each bank depends on the company’s turnover and creditworthiness. In Germany, GBB-Rating is commissioned to assess the risk in the private deposit insurance fund. In the statutory deposit insurance scheme, regulatory ratios and external ratings are used as scalar factors.

The voluntary deposit protection fund of the Federal Association of German Banks was founded in 1976 and today exists alongside the statutory compensation scheme of German banks that has existed since 1998.

With the voluntary security fund of the private banks, there was a security limit until December 31, 2014, which is 30% of the relevant liable equity of the respective bank per creditor. In the case of a bank’s liable equity capital of, for example, 100 million euros, the assets of each individual customer are secured with up to 30 million euros, provided the fund has the appropriate funds. The protection limit will be gradually reduced: From January 1, 2015, the protection limit per creditor will be 20%, from January 1, 2020 initially 15% and from January 1, 2025 then 8.75% of the bank’s liable equity capital, which is relevant for deposit protection.

It is crucial for bank customers that banks must inform their customers before opening an account whether or not they belong to the deposit protection fund, Section 23a of the German Banking Act. Today this query can also be carried out online at the Association of German Banks.

The protection of the voluntary deposit protection fund begins where the statutory protection of the compensation scheme of German banks ends. In the event of the insolvency of a participating institution, the deposit protection fund takes over the parts of the deposit that exceed the EUR 100,000 limit up to the respective protection limit.

Rating Forest Investments

Criteria, Definitions, Investors, Read

Understanding the importance of sustainability has popularized an asset class that used to be reserved for the state, churches and nobles. Forest – to be precise its wood – has always served people as fuel, product and building material. Forest has now become the epitome of sustainable investments. The idea of sustainability emerged in a time of crisis and scarcity. Around 1700, the mining industry and livelihood of thousands was threatened in Saxony. The problem was an acute scarcity of timber. The mining industry and smelting of ores had consumed whole forests. Trees had been cut at unsustainable rates for decades without efforts to restore the forests. In Germany, the term sustainability is associated with Hans Carl von Carlowitz. He was raised in and influenced by the aforementioned environment of wood scarcity. He traveled widely in his youth and learned much from the forced discipline of the French minister Jean Baptiste Colbert, who had enacted a forestry reform in France. Carl von Carlowitz’ view that only so much wood should be cut as could be regrown through planned reforestation projects, became an important guiding principle of modern forestry.

In this preliminary article you can learn more about some risks and rewards of buying forests and what you should consider when buying forests. Given the popularity of forest investments, the question arises as to which ratings are available to investors as decision-making aids. The first question to be asked is which instruments can be used by investors to tap into this asset class. The most common investments in forests are shares, direct investments or closed-end funds. Whereas in direct investments investors invest directly in one or more trees on specific areas and leave the management to a service provider, closed-end forestry funds are less individual.

  • A forestry share is a security which securitises a share in a stock corporation whose capital is invested to a large extent in forest property or wood processing. Primarily Scandinavian and North American forestry stock corporations are traded. There are no German forestry stock corporations with significant free float on the stock exchange. Buying forestry shares does not necessarily mean planting new trees.
  • A closed-end forestry fund or closed-ended forestry fund is a collective investment model based on issuing a fixed number of shares which are not redeemable from the fund. Unlike open-end funds known for corporate stock and bond investments, new shares in a closed-end forestry fund are not created by managers to meet demand from investors. Instead, the shares can be purchased and sold only in the secondary market, which is the original design of the mutual fund, which predates open-end mutual funds but offers the same actively-managed pooled investments.
  • Direct investment in forest means becoming the owner of the forest yourself and thus acquiring all the rights and obligations of a forest owner. The investor needs to be able to maintain regular forest care. As a forest owner, you also have certain obligations, since you are legally obliged to ensure road safety. This means that all trees and branches that are located in places with increased traffic – for example on country roads or hiking trails – have to be felled or trimmed as soon as they pose an increased risk for humans. Buying forests also means taking responsibility.

The implications for the rating approaches to these investment alternatives are considerable.

Forestry shares being tradable on the stock exchange at any time are subject to extreme fluctuations in value. The valuation of most listed forestry shares has a history of having fluctuated by several hundred per cent. Such fluctuations in value mean that ratings of these stocks can quickly become out of date. In fact, a buy recommendation can turn into a sell recommendation within a day if the stock market price quickly exceeds the fair value. Most forestry share companies are predominantly wood processors, who are strongly affected by economic fluctuations and thus by fluctuations in pulp or timber prices. Therefore there is a strong dependence of many forestry shares on economic trends.

Direct forestry investments in precious woods, on the other hand, can react better to market fluctuations by postponing the harvest. The trees are left in the forest until the harvest is worth it – they become bigger, taller and more valuable every day. Fuctuations in precious wood prices have historically been significantly lower than those of timber or wood used for pulp production.

In Germany in particular, the very contradictory regulations must be observed. For decades, the German government has not consistently supported wealth creation through property acquisition. Pay attention to the municipality’s right of first refusal. In this sense, there are no secure legal bases for forest investments in Germany, because rights of first refusal can hinder both buying and selling. In addition, the following contradictions must be observed.

The yields generated from a direct forestry investment are generally tax-exempt while the price gains of forestry shares and forestry shares dividends are subject to the almost 30 per cent flat rate withholding tax including solidarity surcharge and church tax. On the other hand, the transaction costs are significantly higher than with stocks. In addition to the purchase price, land transfer tax, notary and fees, which often make up ten per cent of the purchase price, are added, thus significantly reducing the returns for forest investors. Property tax has to be paid annually and wood production in Germany is relatively expensive due to environmental regulations and certifications. In addition to the actual purchase price, there are also other costs when buying a forest which would not be part of the rating analysis of an independent forest rating. For example, you have to include the costs for the notary, usually 1.5% of the purchase price (the percentage can be higher for small areas) and the property transfer tax, around 4% – 6.5% of the purchase price. You must also not ignore the broker’s commission.

As a forest owner, you also have to pay additional costs.

Property tax, accident insurance and, if applicable, contributions from the soil and water associations are to be mentioned here. With the management of the area, the ancillary costs are always offset by possible income from the sale of wood.

Forest areas in other countries offer far higher returns, although buying forest in foreign countries can be difficult for foreigners. It is much easier to hire companies to lease or buy forests or fallow land in other countries, to manage them in order to generate yields for investors. The country rating must be taken into account for every investment abroad. The country rating is used to assess the economic, social and political risk that an investor will be prevented from receiving the income due to him.

Forest investment providers advertise the scarcity of forest. They argue, that the benefits of forestry investments are the growing demand for the raw material wood. Whether there are fewer and fewer forest areas and whether the demand for wood exceeds the supply has to be tested continuously.

Forestry investments are not always socially beneficial, especially when stock corporations and other big companies buy cheap land in foreign countries and perhaps even displace locals, or the price of land for local residents rises immeasurably as a result of land purchases. Forests are not always ecologically friendly. Thousands of hectares with cloned eucalyptus or teak planted in rows are no gain for nature. Many insecticides and pesticides that pollute and destroy the soil and the environment are sometimes used to increase output.

In any case, structurally rich forests with many different tree species offer a better and safer alternative to planted conifer monocultures that are based on only one tree species. Although these grow faster, they are also susceptible to storms, snow, ice and pests. Mixed forests of deciduous and coniferous trees are not only more stable and better adapted to climatic changes, they also allow you to react more quickly to changes in the demand for wood species on the market.

Any forest rating should also pay attention to the age of the forest. Young forests, in which there are only a few old trees, initially require more maintenance. Of course, they can more easily be designed according to your ideas. The young forest will initially generate little income from wood sales through its maintenance. Forests of old age with significantly taller and thicker tree trunks enable an early profit from the logging and sale, but require care for the new generation of trees.

Good soil and suitable tree species mean that larger quantities of wood of better quality can be expected in the long term.

This is likely to be reflected in the cost of purchasing the forest, especially if the seller has had the forest valued by an appraiser. Regardless of the quality of the soil, its location is a decisive criterion for price formation. So it depends a lot on where the forest is located. A forest area near Munich will therefore cost significantly more than a similar one in the countryside in Saxony-Anhalt. The standard land value is derived from the average price of areas sold in the area and, in addition to the special features of the forest area offered, serves as an aid to determining the actual value.

If the forest is well cared for and there is already a lot of high-quality wood to be expected on the area initially, then you should also expect higher costs. In any calculation, bear in mind that there are usually additional costs for managing the forest. So you cannot count the expected cubic meters of harvest one-to-one with the wood prices and use this to conclude the profit. If the area is difficult to access, the wood harvest is also time-consuming. If it is a particularly protected forest, for example in a nature reserve, then management is only possible to a limited extent. The ideal value of these forest areas is all the higher for one or the other, especially if rare animal and plant species live in this forest. You should therefore be clear about your goals in advance and only acquire forest if it fits your previously set goals.

In addition, a forest rating process should include a step in order to check any “contaminated sites”. For example, if the forest is on a former military site, the trees there may have been damaged or the ammunition in the ground has to be laboriously cleared.

All closed-end forestry fund investments have one risk factor: the long contract term. Even with sustainable forestry investments which respect human rights and the environment, the planted trees need lots of time to grow. On ecologically farmed land, they probably take even longer to grow than the fast-growing trees in monocultures, which are harvested earlier, to produce cheap pulp and biomass. During long contract terms, much can happen: companies can fall victim to mismanagement or go bankrupt, the regions in which the forests grow can become politically unstable.

Natural events such as fire, earthquakes, droughts or floods also have a lot of time to occur over the years.

Forestry investment are therefore right for investors in particular if they do not shy away from risks, have the necessary financial means and staying power until the trees generate returns. If you take over a neglected forest that does not promise stability and is therefore susceptible to pests or storms, that does not necessarily mean that it is a bad deal. Careless forest care can have a positive impact on the purchase price and there may be a lot of potential in your future forest. An unkempt forest can be a deterrent, but it is up to the investor to shape and maintain the forest. What possibilities are opening up in the forest and what additional costs have to be reckoned with for any maintenance measures? With almost every intervention in the forest, whether in well-tended or unkempt forests, financial resources are necessary.

Some native tree species have been planted in the wrong locations in the past. This can result in poor growth, instability and increased susceptibility to damage. To select tree species that are appropriate to the location requires a lot of expertise. To increase the stability of a forest and make it fit for the next centuries requires a forestry rating first.

Ecological goals or enjoying forest ownership are important motives for some investors. Because while it has a personal value for some, only the regularly generated income plays a role for others. However, if one compares direct forest investments with other investment options such as stocks, then short-term gains are generally not to be expected. Every rating approach for direct forest ownership has to take this into account. Forest ratings are possibly the ratings with the longest time horizon. Long-term bond ratings – for comparison – usually only refer to a forecast period of four to five years.

Forests give us the sustainable resource wood, which will also be of ever greater importance in the coming generations.

That makes the forest relatively stable as a system. However, for a fast growing return, other investment methods are a better alternative. So buying a forest is a decision that should be made not only for financial reasons, but also for a certain amount of idealism and enjoyment of nature. Forest investors are similar to investors who invest for ethical, ecological or social reasons.

Forest has been in great demand in Germany for a number of years and has often been family-owned for generations. In addition to the forest exchange, there are a few other real estate portals and tender platforms on the Internet that also offer forest. Depending on the respective provider, there may be costs for registration or an application. In some cases, brokers are also placed between the buyer and seller from the outset.

A responsible forest office or an auction houses in the area, the member newspapers of forest owners’ associations for forest pieces on offer or the advertising section of the regional newspapers might provide information on forest for sale. With currently estimated 1.9 million forest owners in Germany, investors are also well advised to ask around in their private or professional environment. The chance that you have forest owners in your circle of friends is quite high.

unrecognizable multiethnic friends in masks standing in subway train

FFP2 Masks Tested


The rating of the ffp2 masks by Stiftung Warentest needs repair.

Stiftung Warentest is a foundation established in 1964 by the German federal parliament with the aim of helping consumers by providing impartial and objective information based on the results of comparative investigations of goods and services.

The organization buys products anonymously from retailers, and make covert use of services, carries out tests in independent labs that use scientific methods and follow their specifications and give verdicts ranging from „very good“ to „unsatisfactory“, based solely on objective results. The findings are published free of adverts in their magazines „test“ and „Finanztest“, and online at

A lot of time has passed since the 1960s and conditions have changed. For consumers, many more products and providers are relevant today than they were in the 1960s, as these are easy to find on the Internet. This makes it difficult for an organization “Stiftung Warentest” to keep track of all relevant products.

An example of this is the test of FFP2 masks that was published at the end of February. The test organization set up by the German Bundestag ignores precisely those masks that were the first to be tested by TÜV Rheinland from German production. If you are looking for the test results for the masks from the STOLFIG.SHOP, you will not find what you are looking for.

bitcoins and u s dollar bills

From Money Substitute to Lottery Substitute


The average Bitcoin holding time for investors is estimated 3.1 years.

However, as a new Handelskontor infographic shows, there has recently been a change: More and more traders are appearing, while the relative proportion of long-term investors is falling.

According to research done by Handelskontor, at the beginning of March there were 5.41 million Bitcoin traders – more precisely, so many BTC addresses where Bitcoins were held for less than a month. In November of last year there were only 3.56 million.

The effect shown can be due to an increased use of cryptocurrency as a means of payment, as well as to increasing trading for speculative intentions. Judging by the advertising in the social media, however, when buying Bitcoin, the focus is on speculation about quick wins, and the payment function is hardly mentioned.

The addresses on which the Bitcoins are held for at least 12 months and are not transferred make up an ever smaller relative share of this popluation. This fell within the last 5 months from 64.79 to 58.88 percent.

In the social media these days, optimistic comments on the subject of Bitcoin predominate. In the last 7 days, 110,042 tweets with a positive connotation regarding the development of the crypto currency were posted, whereas the number of negative comments only amounts to 26,253. The vast majority, however, were neutral. This could be an indication that – in spite of all the highs – there is still no euphoria.

Google data shows that the demand for Bitcoin is extremely high, but that altcoins are also increasingly in demand. The search volumes for the crypto currencies Ethereum and IOTA also recently reached new highs.

faceless woman with bull skull in countryside

Resistance of the Gallic Village

Read, Systems

France and Germany are still a long way from having an efficient social credit system.

One of the many prerequisites for a functioning social credit system is the abolition of cash, because only electronic money would allow the state to exercise complete control over all transactions of the citizens. But this control is in turn necessary to enforce the results desired by a social credit system.

The argument for a cashless society has been around for a while, but the rapid rise of the Coronavirus crisis has intensified the debate again amid concerns about banknotes and coins transmitting the virus. In addition to this, the increasing decline of high street bank branches and ATMs has made the possibility of a cashless society in the next few years more likely than ever before.

Interested in financial transactions, analysed the latest data from YouGov, to discover which countries in the world would most be in favour of a cashless society. A total of 25,823 individuals were surveyed for the research, 2,049 from Germany.

India is in number one spot as an overwhelming 79% of Indians would like to have a cashless society in their country. In second position is Malaysia, where 65% of Malaysians are in support of having a cashless society in their country. The United Arab Emirates (UAE) and Indonesia are in joint third place, as 63% of citizens in each respective country believe becoming cashless will have a positive impact on their society and economy. Vietnam (60%) and Singapore (56%) are among the other countries where over 55% of citizens are in favour of transitioning towards a cashless society, respectively in fourth and fifth position.

Germany is in 16th place, as 20% of Germans think going entirely cash free would be a great decision for their country. Furthermore, 35% of Germans admit to paying in cash less often since the Covid-19 outbreak.

At the other end in 17th position is France, where only 18% of French citizens would welcome their country being entirely dependent on electronic forms of payment.

luck technology travel time

First crypto fund ratings in Germany

Agencies, Assets, Methodologies

TELOS GmbH, known for their fund ratings in the institutional sector, and DLC Distributed Ledger Consulting GmbH announce a strategic cooperation in the field of crypto fund ratings.

The aim of the cooperation is to connect two worlds – that of classic asset management and that of digital asset management. On the one hand, the partners want to create more transparency in the crypto market, which is still new and relatively unknown for institutional investors. On the other hand, the qualitative rating should give investors security about the know-how of the fund providers in the management of this asset class.

“In the first step, crypto values ​​such as Bitcoin or Ether will probably find their way into multi-asset strategies, after the inclusion of illiquid assets, among other things, one can speak of ‘multi-asset 4.0’. Many investors are already indirectly already today invests in Bitcoin without knowing it – for example, if they hold shares of Tesla, MicroStrategy or the parent company of Twitter, Square, in their portfolio “, says Alexander Scholz, Managing Director of TELOS GmbH.

The expertise of TELOS as an established rating agency, even in complex fund products, and the in-depth expert knowledge in the field of crypto assets from DLC Distributed Ledger Consulting should complement each other: “We take on the role of technical specialists in the cooperation and also advise on innovative incentive models for digital assets. Specifically, for example, we carry out smart contract audits of the tokens in a fund and in this way significantly increase security for the respective asset manager and, of course, the investor,” says Dr. Sven Hildebrandt, who was employed by a capital management company before DLC was founded.

Both cooperation partners assume that the universe of crypto funds, which is attractive for institutional investors, will increase exponentially. As market participants understand the asset class and its attractiveness in the overall portfolio context (correlation effects, improvement of the Sharpe ratio), questions about practical portfolio implementation and risk management will come to the fore, especially when choosing the right investment product and asset manager.

Bank Rating – Normative Banking Regulation in the Financial Market Crisis


Oliver Everling and Karl-Heinz Goedeckemeyer (publisher): Banking Rating – Normative Banking Regulation in the Financial Market Crisis, 2nd Edition, Wiesbaden 2015, Springer Gabler,, Copyright Springer Fachmedien Wiesbaden 2004, 2015, ISBN 978- 3-8349-4734-5, DOI 10.1007 / 978-3-8349-4735-2, eBook ISBN 978-3-8349-4735-2, 529 pages.

Particularly after the financial market crisis, the serious, sound assessment of the creditworthiness of banks is of particular importance. High-ranking experts from various perspectives (banking, auditing, commercial law firms, rating agencies, management consultancy) provide competent, useful assistance in this work. Since the first edition of this book, a plethora of topics has been added, particularly concerning the regulation of banks. Bank ratings are being influenced by state regulations, as hardly ever before. Thus, the focus of the contributions of this editorial work shifted to the resulting issues.

The content:

  • Assessment aspects of the business strategies of European banks
  • Methods of business assessment of banks
  • Interpretation of the bank accounting
  • Implications of ratings for the valuation of banks and bank rating systems
  • Overall bank management and credit risk management
  • Banking regulation
  • Rating and financial market communication

Oliver Everling und Karl-Heinz Goedeckemeyer (Herausgeber): Bankenrating – Normative Bankenordnung in der Finanzmarktkrise, 2. Auflage, Wiesbaden 2015, Springer Gabler,, Copyright Springer Fachmedien Wiesbaden 2004, 2015, ISBN 978-3-8349-4734-5, DOI 10.1007/978-3-8349-4735-2, eBook ISBN 978–3-8349-4735-2, 529 Seiten.

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