2nd credit rating agency in RP formed

PhilBizInfo Inc., a local commercial and consumer credit bureau, has teamed up with Indian rating company ICRA Ltd. to form the second rating agency in the Philippines.

Originally known as Receivables Integration Systems Inc., PhilBizInfo is a leading independent third party service provider of quality information for both local and international requirements of the business industry.

PhilBizInfo president Jaime Ladao informed the Securities and Exchange Commission that it has signed a memorandum of agreement with ICRA to set up a new credit rating agency in the country. ICRA is 20-percent owned by Moody’s Investors Service.

Ladao said the new rating agency to be known as Asian Ratings Inc. will be organized prior to the operations of the fixed income floorless exchange being established by the Bankers Association of the Philippines. The name though has already been registered with the SEC, Ladao said.

The new rating agency is expected to compete with Philippine Rating Services Corp.

Apart from Ladao, other directors of PhilBizInfo are former Customs Commissioner Guillermo Parayno, Noe C. Quintana, Victor dela Dingco, and David Emery. All have extensive experience in information and receivable management.

PhilBizInfo provides solutions to various markets through the use of the latest information and communication technology. An associate of Dun & Bradstreet Corp., PhilBizInfo can provide information on more than 70 million businesses in over 200 countries around the globe.

The company helps customers with their business decisions through timely, verified, organized and analyzed information.

A credit rating agency is any independent body engaged in the business of assessing an issuer’s ability to pay interest and repay capital in a timely manner. Credit rating is required for all issuers of commercial papers.

While it can affect the attractiveness of a company to potential investors (debt or equity), a credit rating is not intended to be an opinion on specific financial obligation, credit quality, business competitiveness, capital market valuation or operational performance.

To ensure that a rating is accurate during the course of a normal business cycle of an issuer, the SEC has required credit rating agencies to monitor on a continuous basis each issuer whose securities it rates.

The rules provide that credit rating agencies have to be accredited by the SEC and must disclose their criteria used to rate securities as well as their limitations.

To get accredited, a credit rating agency is required to maintain a minimum paid-up capital of P50 million and to submit to the SEC various documents, including the list of its shareholders and their corporate affiliations, guidelines pertaining to ownership structure and conflicts of interest, a written code of conduct to insure the independence of rating specialists and a copy of model written agreement with issuers.