It Happened the Way it Had To

Actions, Assets, Repairs

The news is not entirely unexpected, as this company became a case for RATING©REPAIR some time ago (see here). Samhällsbyggnadsbolaget i Norden AB (publ) (SBB) is now taking measures to prevent the credit rating from slipping after all.

Now the company is selling two properties in Norrtälje for an agreed property value of approximately SEK 150 million to the real estate company Genova. The properties that are sold are mixed properties containing a practical high school and light industry / warehouse. The properties have an estimated net operating income of approximately SEK 7.2 million, says the company, the average remaining contract period is approximately 4.3 years.

“Our main focus is to achieve a higher credit rating and this sale of non-core holdings in line with book values ​​further contributes to our opportunities to strengthen the balance sheet,” says Oscar Lekander, Vice President and Chief Operating Officer, Samhällsbyggnadsbolaget i Norden AB.

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New Political and Economic Burdens Ignored


Scope affirms Ilija Batljan Invest AB’s issuer rating at BBB-/Stable. This news must come as a surprise given the current economic and political challenges that have meanwhile added to the factors that already made an “investment grade” rating seem questionable last year.

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Bureau Veritas Helps to Find More Truth About ESG

Products, Raters

Bureau Veritas has an interesting and promising position to support companies on their way to more sustainability. Bureau Veritas helps companies, governments and public authorities reduce their risks in terms of health, quality, safety, environmental protection and social responsibility. Those challenges are central to societal aspirations.

Bureau Veritas is a world leader in laboratory testing, inspection and certification services. Created in 1828, the Group has close to 78,000 employees located in more than 1,600 offices and laboratories around the globe. Bureau Veritas helps its 400,000 clients improve their performance by offering services and innovative solutions in order to ensure that their assets, products, infrastructure and processes meet standards and regulations in terms of quality, health and safety, environmental protection and social responsibility. Bureau Veritas is listed on Euronext Paris and belongs to the Next 20 index.

In addition to the actions deployed in its own operations, through its BV Green Line of services and solutions, Bureau Veritas is empowering organizations – both private and public – to implement, measure and achieve their sustainability objectives. The BV Green Line scope of expertise covers ESG topics in 5 specific areas:

  • Resources & Production;
  • Consumption & Traceability;
  • Buildings & Infrastructure;
  • New mobility;
  • Social, Ethics & Governance.

Being a Business to Business to Society company comes with a duty: to be exemplary in terms of sustainability internally, and to be a role model for industry in terms of positive impact on people and the planet.

The group’s commitment is to act responsibly in order to “Shape a Better World”.

This commitment was again recognized by several non-financial rating agencies during the third quarter. This is a testament to Bureau Veritas constant efforts regarding sustainability. Since September 17, 2021, Bureau Veritas joined the Euronext CAC 40 ESG Index, which identifies the 40 companies that demonstrate the best Environmental, Social and Governance (ESG) practices.

The non-financial ratings updated during the third quarter are as follows:

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Amongst other non-financial ratings of the Group: MSCI AA rating; CDP B rating, and Gold Class and Industry Mover membership in the S&P Global – Dow Jones Sustainability Indices (DJSI) 2021 Sustainability Yearbook.

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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).

hallway with window

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

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In 2020 DEFAMA Once Again Achieved Highs in All Key Figures


DEFAMA promised to publish the audited figures and the 2020 annual report at the end of April 2021.

According to preliminary and unaudited figures, Deutsche Fachmarkt AG (DEFAMA) achieved a consolidated net income of € 2.5 (2.1) million or € 2.5 (2.1) million in the 2020 financial year with sales of € 14.8 (previous year: 11.2) million . Earned € 0.57 (0.51) per share. This corresponds to an increase of 21%. Funds From Operations (FFO) were € 5.8 (4.6) million or € 1.32 (1.14) per share, an increase of 26%.

DEFAMA has thus achieved the forecasts in the Corona year or even slightly exceeded them for FFO as a central control parameter, although the Management Board has made precautionary value adjustments in the low six-digit range on outstanding payments from tenants that are affected by the lockdown. The management board and the supervisory board want to propose to the general meeting that a dividend be increased from 45 to 48 cents per share.

For the current year DEFAMA is still aiming for an increase in FFO to around € 7.1 million or € 1.61 per share. The annualized FFO of the portfolio should reach at least € 8.0 million by the end of the year. The target figure for the annual surplus is € 3.1 million, which corresponds to € 0.69 per share. According to the communicated distribution policy, the company intends to raise the dividend again for 2021.

DEFAMA currently has a portfolio of 43 retail parks with a total of 179,000 sqm of usable space, more than 96% of which are let. The annualized annual net rent amounts to a good € 14 million. The largest tenants include ALDI, EDEKA, LIDL, Netto, NORMA, Penny, REWE, Getränke Hoffmann, Dänisches Bettenlager, Deichmann, Takko and toom.

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Extended Lockdown Tensions the Spring for a Higher Jump in Sales at Vectron Systems


The listed Vectron Systems AG assumes that when the corona lockdown ends, strong demand for its products can be expected.

This is especially against the background that so far only 30 to 40 percent of the target industry, catering, have converted their till systems in accordance with the new legal regulations. This is also indicated by the relatively good sales in lockdown, although it is obvious for Vectron that these would have been significantly higher without the Corona measures. In August of last year, before the second corona lockdown became known, the company forecast within the medium-term planning that sales in 2021 would increase to around EUR 50.0 million with a simultaneous EBITDA margin of 20 percent .

With more than 225,000 installations, the listed Vectron Systems AG is one of the largest European manufacturers of POS systems. Stable hardware combined with flexible, reliable software has made Vectron the market leader for POS solutions in German-speaking countries and in Benelux in the catering and bakery sectors. Several hundred specialist retail partners sell the products internationally. Digital cloud services are offered under the brand names myVectron and bonVito. The spectrum ranges from loyalty and payment functions to online reservations and online reporting. All services are directly connected to the cash register system.

Since politicians have again extended the lockdown today and were unable to make any clear statements about the final termination of the current lockdown measures, the original planning for 2021 is increasingly fraught with uncertainty. For this reason, the company now considers it necessary to withdraw this as a precaution.

The Management Board justifies its positive assessment for the time after the lockdown with a pent-up need to catch up and with the implementation date of April 1st, 2021 for the mandatory conversion of the cash register systems to the new tax regulations. Many companies have suspended the necessary investments because of the closings, but would have to do so immediately after reopening.

Federal Finance Minister’s Speculators


Issuers must be concerned about the damage to the image of the German financial center caused by the inadequate supervision of BaFIn by the Federal Ministry of Finance.

As part of the federal administration, the Federal Financial Supervisory Authority (BaFin) in Germany is subject to the legal and technical supervision of the Federal Ministry of Finance, within the framework of which the legality and expediency of the administrative activities of BaFin is monitored. For Federal Finance Minister Olaf Scholz, details from his area of ​​responsibility will come to light in the election year 2021.

Employee transactions with stocks or derivative instruments that are related to Wirecard were examined. To this end, all employee transactions reported by employees in the high risk category A between January 1, 2018 and September 30, 2020 were evaluated. The number of transactions which were not reported by the employees of BaFin is not provided. The numbers therefore only relate to those employee transactions that were also displayed by them.

According to the BaFin, the evaluation showed that 510 of the employee transactions reported in the above period were related to Wirecard. 344 deals were stocks and 166 were derivative instruments. This business was done by 85 employees.

The figures suggest an astonishingly high level of financial activity by BaFin employees in their own interests. Obviously, in the federal agency monitored by Olaf Scholz’ Federal Ministry of Finance, self-interest in conducting lucrative speculative transactions has a high priority. In particular, investing in derivative instruments, which BaFin employees around Olaf Scholz (SPD) make active use of, require a large amount of time to monitor issuers and market developments in order to be successful. However, such a high number of these transactions was detected.

The BaFin had to admit anomalies, even about insider trading. According to the special audit, the person concerned was not able to access inside information about their business as intended, i.e. within the scope of their duties. However, she did the deal after the inside information was available in her organizational unit. Because of this and due to other special circumstances, it cannot be ruled out that the person was aware of the inside information. The suspicion of insider trading is therefore in the room and must be clarified further. The BaFin therefore initiated official and personnel law steps and filed a complaint with the responsible public prosecutor’s office.

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Equifax Acquires AccountScoreC


Facilitated by the acquisition of AccountScore, Equifax enhances its consumer and commercial product offerings, combining traditional credit bureau information held by Equifax with bank transaction data.

Regulatory approval for the acquisition has been received from the United Kingdom’s Financial Conduct Authority (FCA). Integration of these new data assets will enable Equifax clients to benefit from higher rates of automated, digital income verification, to carry out more granular assessments of affordability and expenditure and offer more predictive and inclusive credit scoring, by using the most up-to-date information available.

For consumers, this combined data approach will improve an individual’s ability to demonstrate their creditworthiness by enabling information that isn’t currently used to be taken into consideration. This approach enables financial inclusion for those with ‘thin’ credit files, increasing their potential access to credit at a time of great financial uncertainty.

According to Patricio Remon, President of Europe at Equifax, AccountScore is a pioneering company with a proven track record of building innovative Open Banking platforms. He says, “this signals our commitment to continuously evolve and embrace strategic innovation to support our clients’ digital transformation, and will bring many benefits for their customers.”

“More than 2.5m UK consumers and businesses now use Open Banking-enabled products to manage their finances, access credit and make payments. This growth is helping to empower a generation of consumers, giving them more control over their own financial information, offering them greater access to a wider range of financial products and making it much easier to complete simple digital applications.”

“AccountScore and Equifax have an established and successful partnership, having collaborated on a number of products and offerings over the last two years,” said Emma Steeley, CEO at AccountScore. “This acquisition allows AccountScore to accelerate its growth and reach new customers, backed by a powerful global company.”

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How Sustainable is Tesla’s Bitcoin Investment?


Tesla holds and may acquire digital assets that may be subject to volatile market prices, impairment and unique risks of loss.

“If we hold digital assets and their values decrease relative to our purchase prices, our financial condition may be harmed.” This is the terse statement from the US automotive company on the FORM 10-K to be submitted to the US SEC.

In view of the great attention that Tesla enjoys, the group apparently accepts that thousands of investors are now investing in bitcoin in the hope of participating in the further increases in value of bitcoin. The question arises whether Tesla’s bitcoin investment was made solely to exploit these effects of its market power. Correspondingly, the company’s ratings should be questioned critically. With a stable long-term rating of B2, Tesla, Inc. is already clearly speculative from Moody’s point of view.

In addition to financial aspects, a sustainability rating also includes ethical, ecological and social issues. If one ignores the ecological criticism of Bitcoin, then Tesla’s behavior must now also be viewed critically under ethical and social criteria.

In January 2021, Tesla updated their investment policy to provide them with more flexibility to further diversify and maximize returns on their cash that is not required to maintain adequate operating liquidity. As part of the policy, which was duly approved by the Audit Committee of their Board of Directors, they may invest a portion of such cash in certain alternative reserve assets including digital assets, gold bullion, gold exchange-traded funds and other assets as specified in the future. Thereafter, they invested an aggregate $1.50 billion in bitcoin under this policy and may acquire and hold digital assets from time to time or long-term. Moreover, Tesla expects to begin accepting bitcoin as a form of payment for Tesla products in the near future, subject to applicable laws and initially on a limited basis, which they may or may not liquidate upon receipt.

The prices of digital assets have been in the past and may continue to be highly volatile, including as a result of various associated risks and uncertainties. For example, the prevalence of such assets is a relatively recent trend, and their long-term adoption by investors, consumers and businesses is unpredictable. Moreover, their lack of a physical form, their reliance on technology for their creation, existence and transactional validation and their decentralization may subject their integrity to the threat of malicious attacks and technological obsolescence. Finally, the extent to which securities laws or other regulations apply or may apply in the future to such assets is unclear and may change in the future.

Moreover, digital assets are currently considered indefinite-lived intangible assets under applicable accounting rules, meaning that any decrease in their fair values below Tesla’s carrying values for such assets at any time subsequent to their acquisition will require Tesla to recognize impairment charges, whereas Tesla may make no upward revisions for any market price increases until a sale, which may adversely affect Tesla’s operating results in any period in which such impairment occurs. Moreover, there is no guarantee that future changes in GAAP will not require Tesla to change the way the company accounts for digital assets held by Tesla.

Finally, as intangible assets without centralized issuers or governing bodies, digital assets have been, and may in the future be, subject to security breaches, cyberattacks or other malicious activities, as well as human errors or computer malfunctions that may result in the loss or destruction of private keys needed to access such assets. While Tesla intends to take all reasonable measures to secure any digital assets, if such threats are realized or the measures or controls they create or implement to secure their digital assets fail, it could result in a partial or total misappropriation or loss of their digital assets, and Tesla’s financial condition and operating results may be harmed.

Since digital assets are considered indefinite-lived intangible assets under applicable accounting rules, any decrease in their fair values below Tesla’s carrying values for such assets at any time subsequent to their acquisition will require Tesla to recognize impairment charges, whereas Tesla may make no upward revisions for any market price increases until a sale. “As we currently intend to hold these assets long-term, these charges may negatively impact our profitability in the periods in which such impairments occur even if the overall market values of these assets increase”, writes Tesla on FORM 10-K.

Moreover, Tesla expects to begin accepting bitcoin as a form of payment for their products in the near future, subject to applicable laws and initially on a limited basis, which Tesla may or may not liquidate upon receipt. With these phrasings, Tesla is giving car buyers an incentive to save in Bitcoin on their car and pay for it in Bitcoin. This implies a further, possibly intended, boost for Bitcoin, although experts warn of the lack of technical suitability of Bitcoin as a means of payment transactions.

“We believe our bitcoin holdings are highly liquid. However, digital assets may be subject to volatile market prices, which may be unfavorable at the time when we want or need to liquidate them”, writes Tesla. The high liquidity of Bitcoin is partly caused by barely controllable market segments that hardly know their limits to money laundering. Therefore, there is also an aspect here that must be taken into account in Tesla’s sustainability rating.

Capital Market Rating


Oliver Everling and Jens Schmidt-Bürgel (editors): Capital Market Rating: Perspectives for Corporate Financing, Betriebswirtschaftlicher Verlag Th. Gabler, Wiesbaden 1st edition December 2005,, hardcover, 318 pages, ISBN 3-409-14242-8.

The financing requirements for companies have changed considerably in recent years. There is a trend from bank-oriented to capital-market-driven financing culture, and corporate bonds are becoming an increasingly important form of financing. Capital market ratings reflect the ability and willingness of a company to fully and timely meet its payment obligations under its debt obligations. This makes them an important instrument for assessing and communicating the future viability of the issuer. For investors, capital market ratings are a tool to assess the credit risk of fixed income securities they wish to buy or sell. Leading investors worldwide rely on ratings, which in turn gives companies a secure and flexible way to raise capital.

In the anthology “Kapitalmarktrating” renowned experts give a practical insight into the process of capital market rating, prerequisites for a good rating, instruments and methods of risk identification and control.

Oliver Everling und Jens Schmidt-Bürgel (Herausgeber): Kapitalmarktrating: Perspektiven für die Unternehmensfinanzierung, Betriebswirtschaftlicher Verlag Dr. Th. Gabler, Wiesbaden 1. Auflage Dezember 2005,, gebundene Ausgabe, 318 Seiten, ISBN 3-409-14242-8.

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How A Credit Rating Agency Should Determine the Weights of ESG Criteria

Agencies, Criteria, Definitions, Methodologies, Read

Moody’s “General Principles for Assessing Environmental, Social and Governance Risks” relate to issues which may have greater downside risk than upside potential for rated issuers. The introduction of these principles is perceived by many issuers as an additional pressure that weighs on them in order to prove their sustainable management. This pressure is unsettling, especially since eco-activists seem uncessantly to come up with new ideas about what additional requirements companies should meet. However, Moody’s methodology shows what rational consideration is all about.

As an example, a company with a track record of health and safety violations may face litigation risks that pressure its operating income, whereas another company that demonstrates outstanding health and safety practices may not see a comparable credit benefit.

Environmental, Social and Governance (ESG) considerations are not always negative; they can be credit strengths. A company or government that has outstandingly strong governance is more likely to have a management culture of 360-degree risk assessment and informed decision-making, which support long-term creditworthiness. Due to the relatively low incidence of ESG strengths that are meaningful to credit profiles, they are also more likely to be considered in other rating considerations outside of a scorecard, but there are exceptions. An example is the business profiles and cash flow stability of renewable energy developers. They may benefit from supportive government policies.

The term ESG refers to a broad range of qualitative and quantitative considerations that relate to the sustainability of an organization and to the broader impact on society of its businesses, investments and activities. Examples include a company’s carbon footprint, or the accountability of a company’s management or a nation’s government.

The criteria used by ESG rating agencies vary widely. Investors as well as issuers complain about the different assessments. In particular, there are no standards by which the correctness of ESG ratings can be objectively checked. The arguments ultimately remain tautological: If arms production is deemed unethical, then companies receive a poor ESG rating if they manufacture weapons. The “performance” of the ratings of an ESG rating agency is good if it has correctly identified companies that manufacture weapons. But whether the underlying dogma is correct is not discussed.

The classification of ESG considerations across financial markets is imprecise, due largely to the multiple and diverse objectives of various stakeholders. Ethical judgments differ massively, even if they have common roots, as in the case of the three world-leading religions of Abraham. Leading credit rating agencies like Moody’s therefore do not get involved in the moral discussion. Instead, they are focused on the aspects of ESG that can have a material impact on the credit quality of an issuer.

Several institutions, notably the Principles for Responsible Investment and the Sustainability Accounting Standards Board, have sought to establish voluntary definitions for ESG, but at this point there is no single set of ESG definitions or metrics that is comprehensive, verifiable and universally accepted. It is not just Jewish, Muslim and Christian approaches that differ. There are thousands of differences among Christians alone. Arbitrary definitions of human rights, fundamental rights, etc. are the result. Legal definitions are therefore only the result of political negotiation or enforcement processes in a political trial of strength and should not be confused with something scientifically observable in nature.

Therefore, the definition of ESG issues is also dynamic because what society classifies as acceptable evolves over time, resulting from new information (e.g., the impact of carbon dioxide emissions) or changing perceptions (e.g., what constitutes privacy). The only way for serious credit rating agencies is therefore to provide transparency into their assessment of ESG risks and benefits by developping an ESG classification nomenclature that includes

  • components (E, S and G) and, for each component,
  • categories and
  • subcategories of the ESG considerations that rating analysts view as most likely to have credit implications across sectors.

“For the E component, the categories are the same for public- and private sector issuers,” writes Moody’s in its updated cross-sector methodology, “and for S and G components, there are different categories for public and private sector issuers.” The materiality, time horizon and credit impact of ESG risks vary widely. Issuers’ fundamental credit strengths or vulnerabilities can mitigate or exacerbate ESG credit impacts. In some cases, ESG-related benefits can be a credit strength. ESG considerations may inform forward-looking metrics or scenario analyses, or they may be incorporated qualitatively.

Given this background, a credit rating agency should seek to incorporate all material credit considerations, including ESG issues, into ratings and to take the most forward-looking perspective that visibility into these risks and related mitigants permits. An ESG rating methodology should only discuss the general principles underpinning the analysis of current and developing ESG risks that can affect credit quality for issuers and transactions in all sectors, because only defaults can be statistically recorded and counted and can thus prove the objectivity of the standards. In this way, credit rating agencies secure the trust of investors who expect rating analysts to provide clear assessments of default probabilities. Moody’s “General Principles for Assessing Environmental, Social and Governance Risks” delivers an example of this approach to ESG considerations.

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A Case of Rating Repair for a Small Publicly Traded Company

Agencies, Analysts, Bureaus, Raters, Read

A small publicly listed company is a company whose shares are bought and sold on a particular stock market even though turnover or total assets are small in comparison to other listed companies. Every big story starts small. Therefore, among small companies there are often also stock corporations with exceptionally high potential for a good share price development. Small businesses can also be great debtors. Well-managed companies can have excellent credit ratings over long periods. Therefore, such companies are attractive to bond investments, provided they have issued bonds.

The internet is full of investment offers. The disadvantage of this information, however, is that it is often written with the interest of selling securities. Many stock market letters testify to how spectacular sounding promise of returns can be advertised to investors. Alternative ways of obtaining reputable information about good companies are therefore of interest.

The following is an example of how an interesting company can be found and analyzed using the database of a credit reporting agency. Thousands of companies worldwide use Creditsafe to grow their business and reduce exposure to customer credit risk. With Creditsafe it is easy to determine the maximum amount of credit to extend to a company based on company information including, payment history, County Court judgments (CCJs), financial stability, credit scores and limits. Credit managers enjoy to be able to access credit reports for companies anywhere in the world.

A database like that of Creditsafe can be used not only in customer and delivery relationships, but also in all other relationships with company stakeholders. The following example shows, on the one hand, which information can give reason to deal with a company in more detail. On the other hand, the example also shows what can be misunderstood and therefore give rise to a rating repair.

Creditsafe allows to search a database of more than 240 million company credit risk profiles to determine the risk when trading with overseas companies. This information is valuable in identifying good quality companies. In particular, companies can also be found that are particularly attractive for their business partners because they have a good credit rating.

For companies in certain industries, a good credit rating is of crucial importance for business success. For example, in most countries around the world, governments apply very strict standards to the companies with which they work. The creditworthiness is checked for each invitation for tenders. The seriousness and creditworthiness of a company that supports governments in the area of security is particularly important.

The following company is a typical example. The listed company (A6T) artec technologies AG from Diepholz / Germany was founded in 2000 by Thomas Hoffmann and Ingo Hoffmann and develops and produces innovative software and system solutions for the transmission, recording and analysis of video, audio and metadata in networks and the Internet. Since 2000, customers have been using the product platforms MULTIEYE® for video surveillance and security, especially in industrial and governmental environments, and XENTAURIX® for media & broadcast applications for monitoring, streaming, recording and analysis of TV, radio and web livestream content. artec offers its customers a complete service (project planning, commissioning, service & support) both for the standard products and the special developments.

The Creditsafe Rating Model is a predictive analysis tool that uses the latest advanced statistical techniques. It combines commercial and other key information, including trade payment information, public information, key financial ratios, industry sector analysis and other performance indicators which provides you with view of a company.

The business credit score measures the likelihood that a business will remain solvent for the next 12 months. But as the executives behind millions of transactions each year are relying on business credit scores to help them answer questions like: Which vendor should we work with? Can we continue to work with this supplier? What kind of terms can we offer them? and How much funding should can we offer them? Business credits scores are much more than that simple definition.

The Creditsafe Rating Model was created by an analytics team who looked at companies that failed over the last 12 months and assessed the commonalities within these failures. They compiled hundreds of variables and looked at the weighting each variable carried along with the impact each variable had on the failed businesses. They then selected a number of variables which were compiled together to create the modules.

The company stands out at Creditsafe with an excellent credit rating. artec technologies AG (DE01958811) is reported with a very good Credit Index of 1.1, a Risk Score of 97 (on a scale from 0 to 100), the best International Score A and an extremely low Probability of Default of 0.06%.

Initially, the good credit rating seems to be confirmed in the balance sheet data. Compared to most other stock corporations in Germany, the company has a high level of equity both in absolute and relative terms. The solid lines in the graph show the comparative values for the 25% and 75% quartiles as well as the medians. Equity is the capital that remains at a company’s disposal after debts are deducted from the total assets.

It is a comparison of the company based on the industry code (primary) with other companies from the same industry. The analysis has been based on the industry code 82 – Office administrative, office support and other business support activities. The Equity Ratio measures the ratio between equity and the total assets of a company.

The Total Borrowing Ratio measures the ratio between debts and total assets of a company. The Debt Ratio measures the ratio between debts and equity of a company. Other key performance indicators measure liquidity, e.g. the Cash Ratio shows the ratio between liquid assets and short-term debts.

The performance indicators determined by Creditsafe include “Capital Structure” and “Liquidity” as well as “Results & Profitability”.

At this point the information must be confusing. No results are reported. This affects the following key figures in the Creditsafe model:

  • Revenue indicates the value of goods and services a company sold within it’s ordinary business activity during a trading period.
  • Pre Tax Profit Is calculated from the operational result plus financial result plus extraordinary result or from the net income plus the net tax expenditure.
  • Net Profit Ratio measures the ratio between operational result and revenue. So it indicates how much the company actually earned with its achieved revenues.
  • Return on Assets indicates the rate of return for a company’s total assets.
  • Return On Capital Employed shows the rate of return for a company’s capital. In distinction from the Return On Assets Ratio , this indicator considers just the long-term capital.

No values are shown for any of these key figures for the company under consideration here, artec technologies AG. Therefore one has to ask about the reasons why there are no values here.

The report of the Deutsche Bundesbank, the central bank in Germany, is also linked on the homepage of artec technologies. Like Creditsafe, this report confirms that the company has a good credit rating.

As part of Eurosystem monetary policy operations, commercial banks can submit credit claims as collateral for refinancing at the Deutsche Bundesbank. For this, the borrowing enterprises must be considered “eligible”. This is checked in a credit assessment conducted by the Bundesbank. Enterprises may also request a credit assessment. In either case, the Bundesbank provides the enterprise with the results of the credit assessment in their entirety. The aim of Bundesbank’s credit assessment system is to estimate an enterprise’s one-year probability of default (PD) on the basis of financial statements as precisely and reliably as possible. For that purpose, Bundesbank uses a statistical methods to select the ratios which, when combined, are best able to predict an enterprise’s PD.

Credit rating grades of the Deutsche Bundesbank and external credit rating agencies authorised in the Eurosystem are related. This is the example of S&P’s credit ratings:

The data input to Creditsafe can easily be checked under the “Documents” tab. This shows that, as expected, Creditsafe used data from the Federal Gazette. German companies are obliged to publish their financial statements in the Federal Gazette. In the case of the artec technologies AG considered here, however, no data on the income statement was published in the Federal Gazette.

The website of artec technologies also offers the reports of three research companies, which offer in-depth analyzes with all other aspects of stock valuation.

The missing income statement in the credit bureau’s report is due to the legal situation for small, medium and large companies. The size classes (Größenklassen) defined in the HGB serve to regulate accounting and publication for incorporated companies (Kapitalgesellschaft). The larger a capital company is, the stricter the requirements for auditing and the more detail required when disclosing the business data. The four size classes are defined in the HGB for accounting law. They are used for corporations, including the GmbH, the UG and the AG. The size classes are also applied to partnerships without a natural person as a personally liable shareholder (GmbH & Co. KG, UG & Co. KG).

In § 267 HGB, four size classes are defined: micro-company, small company, medium-sized company and large company. For each size class, at least two of the three thresholds listed for each class should not be exceeded. The thresholds are as follows:

  • Balance sheet total (Bilanzsumme),
  • Average number of employees,
  • Revenues (twelve months before the balance sheet date).

The thresholds were changed in 2016 with the German Accounting Directive Implementation Act (Bilanzrichtlinie-Umsetzungsgesetz – BilRUG). The size classes are structured as follows:

Determining FactorMicroSmallMediumLarge
Balance sheet total (Bilanzsumme)350,000 EUR6,000,000 EUR20,000,000 EUR> 20,000,000 EUR
Revenues (12 months before the balance sheet date)700,000 EUR12,000,000 EUR40,000,000 EUR> 40,000,000 EUR
Number of employees on an annual average1050250> 250
artec technologies

Small companies must disclose their balance sheet and their notes. The profit and loss account is not mandatory. In addition, the audition requirement is dropped. In the case of artec technologies AG, the information published is part of the company’s follow-up obligations due to its membership of a transparency standard at the Frankfurt Stock Exchange. The obligations result from these obligations, but not from Section 267 of the German Commercial Code.

The shares of artec technologies AG are traded on the Open Market. The Open Market (Freiverkehr) is a regulated exchange market and not an organised market in the meaning of the German Securities Trading Act (section 2 para. 5 WpHG). Unlike the Regulated Market, which is subject to public law, the Open Market is subject to private law. The General Terms and Conditions of Deutsche Börse AG for the Regulated Open Market (Freiverkehr) on Frankfurter Wertpapierbörse (FWB®) regulate the conditions for admission to and the follow-up duties for securities in the Open Market segment. Admission to the Open Market is possible for securities that are neither admitted to trading on the Regulated Market nor included in trading on the Regulated Market.

Issuers and participants in the Open Market are subject to lower transparency requirements than in the Regulated Market. The Open Market segment is therefore an attractive alternative for both young, growth-oriented small and medium-sized companies such as artec technologies AG.

Since all of this information is public, it is advisable to update the information with the credit reporting agencies. Since these credit bureaus have to enter and update very large amounts of data from many companies in their databases, they rely on the official publications of the companies in the Federal Gazette. If the annual financial statements are reported to the Federal Gazette without a profit and loss account, then by default the data from the income statement are not transferred to the credit reporting agency’s database.

Important key figures about the stock corporation can be viewed free of charge on the website of the Frankfurt Stock Exchange. There are also research reports from SMC, EDISON and GBC. Not to be forgotten are the numerous other information tools, such as price information for technical chart analysis and risk indicators such as those from Moody’s, all of which provide information about artec technologies AG and offer investors certainty in their decisions.

Generally accepted, Bayesian statistics is a theory in the field of statistics based on the Bayesian interpretation of probability where probability expresses a degree of belief in an event. For rating systems, this theory says that if information is missing, a judgment should be made more cautiously than if the required information is available. If only the balance sheet and not the profit and loss account are taken into account in a rating, the result may be a poorer assessment. It is therefore advisable to add missing information.

Statistical credit rating models specify a set of statistical assumptions and processes that represent how the sample data is generated. Statistical credit rating models have a number of parameters that can be modified. For example, the event of a default can be represented as samples from a Bernoulli distribution, which models two possible outcomes. The Bernoulli distribution has a single parameter equal to the probability of one outcome, which in most cases is the probability of filing for insolvency. Devising a good model for the data is central in Bayesian inference. In Bayesian inference, probabilities can be assigned to model parameters. Parameters can be represented as random variables. Bayesian inference uses Bayes’ theorem to update probabilities after more evidence is obtained or known.

In our practical case, these theoretical considerations mean that the lack of information can lead to disadvantages in the evaluation. It is more likely that the missing information will result in a worse rating than with full disclosure. In most cases, a better rating is achieved when more information is disclosed.

In the case of a rating agency recognized under the EU regulation on credit rating agencies that carries out a committee-based rating process, however, the lack of information in the case of unsolicited ratings must not be used as a means of pressure on issuers to urge them to commission a rating process. With a credit reporting agency like Creditsafe, however, this case does not matter. The rating is determined purely mathematically-statistically and based on models without involving a rating committee made up of analysts who could make arbitrary decisions. In addition, there is no fee for the rating that could create a conflict of interest. It therefore remains a sensible way to enable a better evaluation by providing more up-to-date information.

In most cases the credit reporting agency provides the assessed company with its own company report free of charge. An application to receive your own report is sufficient with Creditsafe.. The authorization to receive information must be proven by the company’s employee. However, the company is free to refer business partners and investors to the report of the credit reporting agency and the credit rating contained therein. Similar to the reference to the central bank eligibility certified by the Deutsche Bundesbank, such a reference can strengthen confidence in the company being assessed.

The irritation about missing P&L data in the reports of the credit reporting agency about artec technologies can be easily resolved. For this it is not necessary to expand the disclosure to the Federal Gazette. It is sufficient to provide the credit reporting agency with the certified accounts. A form is available for this that simplifies and standardizes the transfer of data. All financial reports can be found on the company’s German website:

However, it can also be advisable to expand the disclosure to the Federal Gazette. Not only Creditsafe, as in the example, but also many other credit reporting agencies, research houses and, last but not least, financial service providers such as banks and insurance companies access the Federal Gazette. In order to fulfill their various obligations, to check the identity of their business partners and to determine the beneficial owner, they need official data.

PALTURAI is the example of a service that is also used by investors and creditors such as banks and insurance companies to examine the situation at a company. For this purpose, PALTURAI analyzes all reports to registration courts as well as to the Federal Gazette. In order to avoid contradicting information and irritations to the detriment of the rated companies, a consistent approach is recommended. The international data flows and interdependencies in the transfer of information worldwide are more complex today than ever before. The task in the context of a rating repair is to bring about the correction in the most efficient way possible.

With a very good rating like the one for artec technologies, the question arises whether the already very good rating could possibly even be called into question through more transparency. The income statement contains additional information that is taken into account when assessing creditworthiness. For artec technologies, the data that cannot be found in the Federal Gazette has now been added. It shows that the creditworthiness is still rated as very good. The company retains its very good ratings.

First Quality Check On A Credit Reporting Agency: Creditsafe

Agencies, Bureaus, Read, Repairs, Uses

This article is about the credit reporting agency Creditsafe, the performance of the company and a concrete example of what a credit report from Creditsafe looks like in practice. Details of the offer are examined and discussed in detail. We carry out a fact check based on the official data from the Federal Gazette of the Federal Republic of Germany.

With more than 1,200 employees, including 120 in Germany, Creditsafe provides business information and financials to over 115,000 customers with over 365 million company data from 160 countries and from more than 8,000 sources. This is roughly an average of more than 300,000 company data per employee, who supports over 500,000 users for 450,000 decisions every day with the data provided by Creditsafe. Company data is updated five million times a day from local sources. This provides insight into the thousands of business events that occur every day. About 60% of reports available online contain payment details from suppliers.

The presentation of Creditsafe is followed by a concrete example. This is a demanding case because it looks so simple and easy to understand at first glance. The example company looks simple, because it is a music house. The business model is very simple. Buying musical instruments from suppliers, selling to customers. But the music house is a wholly owned subsidiary of a parent company. The parent company was founded six years earlier because it focuses on online sales and the entrepreneur previously worked as a sole trader with his family business. The subsidiary does not make use of the permitted exemptions from separate accounting. This raises the question of whether Creditsafe still achieves an appropriate credit rating. In the following, you will first read general information about Creditsafe and the activities of this credit agency.

Creditsafe is fortunate to have an extensive and ever growing database of up-to-date company information. As the database expands and increases the wealth of data Creditsafe holds, they must evaluate whether this data contains information that is indicative of company stability or future insolvency. Creditsafe must also re-validate whether previous indicators of future insolvency or stability remain true. In both cases, it is likely that adjustments to the scorecard will be needed to improve predictability.

creditsafe logo

To differentiate linguistically, Creditsafe calls its customers sometimes “partners” because customers are companies that in turn obtain information about other companies. Creditsafe partners can add companies from Belgium, Germany, Denmark, Finland, France, Great Britain, Ireland, Italy, Japan, Canada, Liechtenstein, Luxembourg, Netherlands, Norway, Austria, Sweden, Switzerland, Spain and USA to a list for which is monitored via email.

Because not all countries use a value from 1 to 100, Creditsafe is using a rating scale from A to E. This rating scale should make it easier to compare the credit risk of companies across national borders. A is the lowest risk, D is the highest, and E means that no assessment has been made.

Creditsafe accesses data on more than 49,000 active listed companies in over 165 countries around the world, as well as hard-to-find historical data on all non-trading companies involved in asset and real estate management:

  • Name, address and contact details of the company (fully verified),
  • Description of the main business activity,
  • Complete data on shareholders and owners,
  • Credit rating and maximum credit limit,
  • Geographical breakdown of sales and turnover,
  • Information about important competitors,
  • Annual and interim reports,
  • Sales, profit and loss accounts,
  • Balance sheets and cash flow,
  • Key balance sheet indicators,
  • Current and former directors,
  • Information about holding companies and subsidiaries,
  • Corporate ties.

The massive use of electronic data processing not only enables this high productivity unimaginable just a few decades ago, but also enables users to check their customers’ credit and financial data in real time. Unlike other credit bureaus, Creditsafe does not save historical reports, but checks all companies about which no information is available immediately. Whenever a report is not immediately available online for review, the company in question is re-examined to collect current, trustworthy information. Creditsafe wants to be able to serve research orders within five and a half days.

Integrating Creditsafe data with a customer relationship management system should be child’s play thanks to preconfigured apps for Salesforce, Sage, SugarCRM, SAP, Microsoft Dynamics, etc. Creditsafe apps should make manual entry and updating of customer data unnecessary and thus save time and resources. An option for the immediate creation and updating of data records is intended to correct and rely on the data.

The application programming interface makes the following systems available for Creditsafe:

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Telephone searches, stock indices, local agents, branches, official gazettes, payment histories, news, banks, directories, courts and registration authorities are among the sources of information (for researching registration addresses, see Civil Address).

Creditsafe also provides mass and individualized data in a file tailored to the ideas of the respective partner. With hundreds of selectable fields that support all aspects of the business, the content is designed to meet the specific requirements. Such files can be securely provided in a format of your choice, daily, weekly, monthly or quarterly.

Via a programming interface, Creditsafe enables integration into customer-specific Customer Relationship Management (CRM) systems and thus the consistent alignment of a company with its customers and the systematic design of customer relationship processes. The programming interface – Application Programming Interface, API for short – is the part of the program that is made available by a software system to other programs for connection to the system.

With Connect API, data should be integrated into the systems mentioned and users should have the opportunity to use Creditsafe business data in any required way. Direct real-time access to company data is intended to enable employees to make quick and informed decisions with data that the company can trust and that allow the development of new functions and automated processes.

If Creditsafe is connected to one of the systems mentioned, the following tasks should be possible:

  • Checking the creditworthiness of suppliers and customers,
  • Representation of corporate ties,
  • Representation of beneficial owners,
  • Credit ratings for companies worldwide,
  • Continuous monitoring,
  • Financial indicators,
  • Current and historical balance sheet numbers,
  • Check for debtor register entries / bankruptcies.

Creditsafe supports customer and credit decisions in companies with creditworthiness information about private individuals, whose data comes from publicly accessible sources. This data is continuously supplemented by data from national and international partners and by manual research. Negative features include recorded in bankruptcy and debtor registers. Overview of all companies in which a natural person is a manager or in which they hold shares (see also Palturai).

The Creditsafe Data Cleaning Tool is a solution to improve data quality and is available in a total of 14 countries to correct duplicates, errors and outdated information, to identify inactive companies and data with a lot of information (such as company master data, balance sheet data, credit ratings, credit limits and contact information) ) enrich.

The Creditsafe Compliance Check supports the identification of potentially high-risk business relationships and their continuous monitoring (monitoring), for example in the case of current and previous sanctions against companies and private individuals, for the identification of Politically Exposed Persons (PEPs) and in the search for court judgments, negative reporting and bankruptcies .

What does a company search on the platform of “” deliver? In the following you will see what creditsafe has to offer, what information to expect and how key performance indicators are calculated. Screenshots as of August 2020 guide you through the Creditsafe cockpit. Click on the screenshots in the text below to overlay images on the current page and see more details.

As the example of the music store shows, a professional assessment of creditworthiness cannot be replaced by looking at a few key figures. In the presentation of Creditsafe, the credit index and risk score reflect the good creditworthiness of the music store, which is based among other factors on high profitability, but not on a high equity ratio. Equity is created in the parent company, the results of the wholly-owned subsidiary are always transferred to the parent company, and any losses would be offset by the parent company. It is only through an overall view of all the relevant assessment criteria that Creditsafe can come to a plausible credit rating of the company’s creditworthiness.

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CleanTech Rating: CleanTech Investment and Financing – Companies and Projects


Oliver Everling (Editor): Cleantech Rating: Investment and Financing of Cleantech – Companies and Projects, Kindle Edition (Amazon Media EU S.à rl), RATING EVIDENCE GmbH, 1st Edition Frankfurt am Main 2015, 268 pages, ASIN: B00QFNHAQ8.

“Cleantech” is not a new buzzword, but names the consistent continuation of a fundamental trend. Clean technologies encompass all products and services that have a positive and sustainable impact on the environment, climate change and humans. Sustainable, efficient and environmentally friendly use of our planet’s scarce resources so that humankind can continue to survive in the long term and sustainably will remain a challenge for science and practice in the long term. This includes both vertical applications and horizontal base technologies.

We do not want to anticipate the definitions of our authors. For example, “cleantech” in this book covers a variety of sectors and subsegments. The rating, ranking or scoring of companies in the field of “cleantech” and the opportunities offered to them is therefore based on the idea of ​​bringing transparency to many investors in an opaque market. The book offers a forum for discussing the nature and design of rating sentences. “Rating” is understood as a generic term for any type of classification for the purpose of preparing investment and financing decisions.

By placing the title on the view of investors or decision makers, the reader should be offered a publication that, although scientifically sound, is rather positioned as a practice-oriented compendium with concrete benefits for those affected. Thus, there is a broad target group for this book: investors in cleantech companies, cleantech entrepreneurs, asset managers, foundations, (eg church) pension funds, financial advisors, investment brokers, banks, insurance companies and other financial service providers, consultants, scientists, business journalists and last but not least – private investors from the entire German-speaking area.

Authors of the book: Jan G. Andreas, Dr. Michael Brandkamp, ​​dr. Matthias Gündel, Thomas Hellener, Christoph Herr, Prof. Dr. Johannes Hoffmann, Wilhelm Kötting, Daniela Kramer, Dr. Ing. Bernd Kreuter, Ingmar Kruse, Dieter Pape, Dr. Ralf-Rainer Piesold, Michael Wilkins, Axel Wilhelm, Stefanie Zillikens.

Oliver Everling (Herausgeber): Cleantech Rating: Investition und Finanzierung von Cleantech – Unternehmen und ProjekteKindle Edition (Amazon Media EU S.à r.l.), RATING EVIDENCE GmbH, 1. Auflage Frankfurt am Main 2015, 268 Seiten, ASIN: B00QFNHAQ8.

Click here to find more books supported by our company.

Basel III: Impact of the New Banking Supervision Law on SMEs


Oliver Everling and Rainer Langen (publisher): Basel III: Effects of the New Banking Supervision Law on the Mittelstand, Bank-Verlag GmbH, 1st Edition Cologne 2013, 199 pages, Art. 22486-1300, ISBN 978-3-86556-354-5.

The book is aimed in particular at the corporate clients of banks who, as with Basel II, are now asking about the consequences of Basel III for optimizing their financing.

The book follows the concept of a collage of papers, statements, and numerous advice – loosened up by interviews – and shows various different perspectives and concrete practical solutions for future SME financing, which should lead to a successful cooperation of entrepreneurs and investors.

The content is structured as follows:

  • General: Regulatory changes – from Basel II to Basel III
  • Bank overview: How is lending policy changing in competition?
  • Entrepreneurship: Consequences in SME financing
  • Solutions at the interface of corporate account managers and entrepreneurs
  • Tips for entrepreneurs (financing, bank discussion, rating process)
  • Special topics (real estate, Austria)

Oliver Everling und Rainer Langen (Herausgeber): Basel III: Auswirkungen des neuen Bankenaufsichtsrechts auf den MittelstandBank-Verlag GmbH, 1. Auflage Köln 2013, 199 Seiten, Art.-Nr. 22.486-1300, ISBN 978-3-86556-354-5.

Transparency Rating: Paths to Efficient Analysis and Valuation of Corporate Accounting


Oliver Everling, Peter Schaub and Rolf Stephan (publisher): Transparency Rating: Paths to Efficient Analysis and Valuation of Corporate Accounting (German Edition), Gabler Verlag – Springer Fachmedien Wiesbaden GmbH,, 242 pages , Wiesbaden 2012, ISBN 978-3-8349-3365-2.

The contributions of the anthology revolve around the financial reporting of companies from the different perspectives of the authors. The authors not only outline challenges and issues, but also present solutions to increase the transparency and efficiency of corporate accounting, as well as their rating and assessment through systematic rating.

By linking the idea to the idea of comparing and classifying alternatives, the reader should be offered a publication that is scientifically sound, but rather as a practice-oriented compendium with concrete benefits in terms of the links between financial communication, accounting, and company management.

Oliver Everling, Peter Schaub und Rolf Stephan (Herausgeber): Transparenzrating: Wege zur Effizienten Analyse und Bewertung der Rechnungslegung von Unternehmen (German Edition), Gabler Verlag – Springer Fachmedien Wiesbaden GmbH,, 242 Seiten, Wiesbaden 2012, ISBN 978-3-8349-3365-2.

Financial Communication: Opportunities Through Credit Mediation


Frank Armbruster, Oliver Everling and Rainer Langen (publisher): Financial Communication: Opportunities through Credit Mediation, Bank-Verlag Medien GmbH,, Cologne 2011, Art. 22,474-1100, ISBN 978-3-86556-262-3.

At the end of 2009, the Federal Government of Germany decided to commission a credit intermediary with the implementation of the credit intermediation procedure. Since then, a number of different private-sector offers have been established on the market – all with the aim of building bridges of understanding between entrepreneurs and banks, overcoming misunderstandings in communication and providing solutions for goal-oriented cooperation in financing issues. Credit mediation should help to improve the supply of the middle class with credits. Credit mediators are independent mediators between the financial and real economy.

Proper financial communication is an essential part of successful corporate governance. Because good financial communication promotes the growth potential of a company and the associated employment effects. The bank does not know how the individual entrepreneur is “ticking”. The best way to solve this problem is to create a win-win situation for the bank and the entrepreneur. The loan mediator will help prepare for the bank conversation, analyze business models or provide public support programs.

Frank Armbruster, Oliver Everling und Rainer Langen (Herausgeber): Finanzkommunikation: Chancen durch Kreditmediation, Bank-Verlag Medien GmbH,, Köln 2011, Art.-Nr. 22.474-1100, ISBN 978-3-86556-262-3.

Buy, Rent and Lease in the Rating


Christoph J. Börner, Oliver Everling and Robert Soethe (publisher): Buy, Rent and Lease in the Rating: Assessing the Financing Paths of Long-lived Assets Reliably, Betriebswirtschaftlicher Verlag Dr. Th. Gabler, Wiesbaden,, hardcover, 1st edition 2008, 305 pages, ISBN 978-3-8349-0543-7.

Businesses depend on the use of long-lived assets in their business activities. In addition to the purchase here offer the procurement options in connection with rental and leasing contracts. However, which option is more effective for the respective company can hardly be assessed universally. The complexity of the comparison results from the diversity of objectives and instruments, the different expectations regarding usage patterns and cost structures.

The rating provides a new starting point for comparing the design options of purchase, rent and leasing. The impact of buying, renting or leasing in rating has become even more relevant to the financial management of any company since the entry into force of Basel II. This book systematizes from various perspectives the technical discussion of the effects of purchase, rent or leasing in the rating.

The main topics are:

  • Economic and legal bases
  • Design alternatives according to commercial and tax law as well as IFRS
  • Special features of individual asset classes (real estate, movables, intangible assets)
  • Design options in Ratings

Christoph J. Börner, Oliver Everling und Robert Soethe (Herausgeber): Kauf, Miete und Leasing im Rating:: Finazierungswege langlebiger Wirtschaftsgüter sicher beurteilen, Betriebswirtschaftlicher Verlag Dr. Th. Gabler, Wiesbaden,, gebundene Ausgabe, 1. Auflage 2008, 305 Seiten, ISBN 978-3-8349-0543-7.

Rating Software


Werner Gleißner, and Oliver Everling (publisher): Rating Software. Which Products Are Used by Whom ?, Verlag Franz Vahlen,, Munich 2007, 448 pages, ISBN 978-3-8006-3248-0.

For many medium-sized companies, the question of improving their own rating results is currently being raised, even if they want to compete for debt capital in the future after the Basel consultation paper comes into force in 2006. For this purpose, a variety of rating software offers already exist on the market.

However, as a rule, the software application does not provide sufficient transparency as to which evaluation methods and weighting of the partial results are carried out. Therefore, it makes sense to use a decision support in the choice of rating software and to evaluate the software used accordingly.

In Part I of the book, based on the methodology and the requirements of a rating based on the Basel II Accord, the requirements for a rating software are described by the publishers and their evaluation criteria are presented. In addition, the design variants of the software are systematized. Furthermore, the state and development tendencies of this expanding field of application are shown.

In Part II, well-known authors from the rating advisory sector compare and rate the rating software products available on the market. In doing so, both the scope and the system of presentation are strictly defined for the individual contributions in order to make the comparative assessment objective.

Parts III and IV present various rating software systems, highlighting both bank-specific features and the application of the software and concrete experience reports.

The book is best for specialists and executives of medium-sized companies, credit institutions, tax consultants, auditors and management consultancies.

Werner Gleißner, und Oliver Everling (Herausgeber): Rating-Software. Welche Produkte nutzen wem?, Verlag Franz Vahlen,, München 2007, 448 Seiten, ISBN 978-3-8006-3248-0.

Financial Rating


Ann-Kristin Achleitner, Oliver Everling and Karl A. Niggemann (Publisher): Financial Rating: Design Options for Improving the Creditworthiness, Betriebswirtschaftlicher Verlag Th. Gabler, Wiesbaden, 1. edition January 2007,, hardcover, 275 pages, ISBN 978-3-8349-0245-0.

Within the scope of corporate financing, there is a need for each company to document its own balance sheet credit rating. Especially lenders need information about a company’s ability to meet its future payment obligations on time and in full. In this context, a financial rating represents an optimal instrument for the early recognition of impending financial risks for every entrepreneur and is the basis for preparing for negotiations with lenders. This book explains the hard facts and quantitative criteria that are important in the rating and is very practice-oriented. An important focus is the detailed presentation of the annual financial statements analysis and the balance sheet analysis in the rating.

Ann-Kristin Achleitner, Oliver Everling und Karl A. Niggemann (Herausgeber): Finanzrating: Gestaltungsmöglichkeiten zur Verbesserung der Bonität, Betriebswirtschaftlicher Verlag Dr. Th. Gabler, Wiesbaden, 1. Auflage Januar 2007,, gebundene Ausgabe, 275 Seiten, ISBN 978-3-8349-0245-0.

Succession Rating


Ann-Kristin Achleitner, Oliver Everling and Stefan Klemm (publisher): Successor Rating: Rating as an Opportunity for Company Succession: Rating as an Instrument of Medium-sized Company Succession, Betriebswirtschaftlicher Verlag Th. Gabler, Wiesbaden 1st edition January 2006,, hardcover, 366 pages, ISBN 3-409-14327-0.

The topics “medium-sized business succession” and “rating” are closely interwoven. At the latest when the bank adapts the credit terms with the reference to the age and the unresolved succession question of the entrepreneur to the increased credit default risk from their point of view, it is worth analyzing the underlying relationships.

Basel II motivates banks to adjust the loan terms to the respective risk assessment of the borrower. At the same time, banking supervision does not stick to qualitative direction. Rather, it is precisely prescribed with how much equity the bank has to deposit loans of different risk classes. In addition, Basel II provides guidelines for the design of bank-internal rating systems.

The systematic recording and evaluation of factors such as an “existing emergency planning” or “existing succession planning” are the consequence. A lack of succession planning leads more frequently than before Basel II to significantly worse credit conditions up to the refusal of credits. Even the good personal relationship with the corporate customer service can not help here.

With the concretization of the Basel II guidelines by the banks and thus systematization of the evaluation of the credit risk, the leeway of the account managers disappears. Here we see a focus of the editorial volume – with up-to-date reference and direct assistance for the concerned entrepreneur. The present book shows internal views of the bank’s internal rating. The underlying regulations are presented and explained in detail. It will be shown where creative leeway opens up and how individual banks implement the requirements. This explanatory information is followed by concrete help for the entrepreneur. In doing so, the relation to succession is always established and the meaning of the controlled succession planning as an input parameter of the rating is reflected.

Ann-Kristin Achleitner, Oliver Everling und Stefan Klemm (Herausgeber): Nachfolgerating: Rating als Chance für die Unternehmensnachfolge: Rating als Instrument der mittelständischen Unternehmensnachfolge, Betriebswirtschaftlicher Verlag Dr. Th. Gabler, Wiesbaden 1. Auflage Januar 2006,, gebundene Ausgabe, 366 Seiten, ISBN 3-409-14327-0.

Capital Market Rating


Oliver Everling and Jens Schmidt-Bürgel (publisher): Capital Market Rating: Perspectives for Corporate Financing, Betriebswirtschaftlicher Verlag Th. Gabler, Wiesbaden 1st edition December 2005,, hardcover, 318 pages, ISBN 3-409-14242-8.

The financing requirements for companies have changed considerably in recent years. There is a trend from bank-oriented to capital-market-driven financing culture, and corporate bonds are becoming an increasingly important form of financing. Capital market ratings reflect the ability and willingness of a company to fully and timely meet its payment obligations under its debt obligations. This makes them an important instrument for assessing and communicating the future viability of the issuer. For investors, capital market ratings are a tool to assess the credit risk of fixed income securities they wish to buy or sell. Leading investors worldwide rely on ratings, which in turn gives companies a secure and flexible way to raise capital.

In the anthology “Kapitalmarktrating” renowned experts give a practical insight into the process of capital market rating, prerequisites for a good rating, instruments and methods of risk identification and control.

Oliver Everling und Jens Schmidt-Bürgel (Herausgeber): Kapitalmarktrating: Perspektiven für die Unternehmensfinanzierung, Betriebswirtschaftlicher Verlag Dr. Th. Gabler, Wiesbaden 1. Auflage Dezember 2005,, gebundene Ausgabe, 318 Seiten, ISBN 3-409-14242-8.

Legal Issues in Ratings

Books, News, Notching, Platforms, Procedures, Registrations, Regulations, Repositories

Ann-Kristin Achleitner and Oliver Everling (Editor): Legal Issues in Ratings: Fundamentals and Implications of Ratings for Agencies, Investors and Companies Advised, Betriebswirtschaftlicher Verlag Th. Gabler, Wiesbaden 1st edition November 2005,, hardcover, 470 pages, ISBN 3-409-14314-9.

The issuing of ratings by external rating agencies as well as internal ratings are of increasing relevance for the refinancing processes as well as for investment decisions on the part of investors. The book outlines the main legal implications of ratings for agencies, investors and rated companies.

Ann-Kristin Achleitner und Oliver Everling (Herausgeber): Rechtsfragen im Rating: Grundlagen und Implikationen von Ratings für Agenturen, Investoren und geratete Unternehmen, Betriebswirtschaftlicher Verlag Dr. Th. Gabler, Wiesbaden 1. Auflage November 2005,, gebundene Ausgabe, 470 Seiten, ISBN 3-409-14314-9.

Rating Practice Manual


Ann-Kristin Achleitner and Oliver Everling (Publisher): Rating Practice Manual: Answers to the Challenge Basel II, Betriebswirtschaftlicher Verlag Th. Gabler, Wiesbaden 1st edition May 2004,, hardcover, 952 pages, ISBN 3-409-12523-X.

How is the rating market organized? What is the best possible preparation for a rating? How can you use and improve ratings? Renowned experts point the way to optimal credit rating and favorable conditions.

Ann-Kristin Achleitner und Oliver Everling (Herausgeber): Handbuch Ratingpraxis: Antworten auf die Herausforderung Basel II, Betriebswirtschaftlicher Verlag Dr. Th. Gabler, Wiesbaden 1. Auflage Mai 2004,, gebundene Ausgabe, 952 Seiten, ISBN 3-409-12523-X.

Rating – Opportunity for SMEs According to Basel II


Oliver Everling (Publisher): Rating – Opportunity for SMEs according to Basel II. Concepts for Credit Assessment, Key to Financing, Betriebswirtschaftlicher Verlag Th. Gabler, Wiesbaden 1st edition December 2001,, hardcover, 700 pages, ISBN 3-409-11812-8.

As recently as the 1980s, ratings in the German-speaking world were regarded as a peculiarity of the US capital markets. At that time, ratings and rating agencies in at least 50 countries were also widespread outside the United States. At first it seemed that differences in the financial systems were responsible for the fact that ratings did not spread in Germany: the universal banking system here, the segregation banking system there. Too big were the opposites. On the one side of the Atlantic, virtually every company present on the capital market was already equipped with ratings, on the other side of which the circle of rated companies was limited to those that served the international financial markets. Even for this circle the relevance of ratings had to be questioned.

What benefit should be associated with the classification of globally known “first” addresses? So the creditworthiness of such companies in financial circles was long known! However, it was precisely the Siemens group that was the first address in the industry in Germany to be rated as an independent agency. “Rating” has long since developed into an indispensable business card on the international financial markets. Those who were above any credit rating found that rating was a crucial additional element of building trust among financiers. For business partners around the world, the rating is the essential signal for assessing the viability of a company.

Oliver Everling (Herausgeber): Rating – Chance für den Mittelstand nach Basel II. Konzepte zur Bonitätsbeurteilung, Schlüssel zur Finanzierung, Betriebswirtschaftlicher Verlag Dr. Th. Gabler, Wiesbaden 1. Auflage Dezember 2001,, gebundene Ausgabe, 700 Seiten, ISBN 3-409-11812-8.