1. SADC-DFRC Workshop Presentation by Charl Kocks and Marius Ferreira
26 March 2009

2. Credit ratings Background Concept: opinions on ability to pay
on time and in full
by an independent party
who should take risk (...!)

3. Criteria – the “rules” Why How What International Comparisons possible
Rigorous and tough
Highly important

4. Rating process Step one: request Step two: information
Step three: analysis
Step four: on-site meetings
Step five: further analysis
Step six: draft opinion
Step seven: meeting with peers
Step eight: result

5. Using the rating Internal External upwards External sideways Roadshows
Customers
Counterparties
Regulators

6. Assisting relationships
Between Govt and DB:
independent party
new perspectives
sustainability
logic prevails
international “rules”
lack of vested interest
quid pro quo: market tells

7. Ratings advisors Idea behind it Benefits Shortcomings
Before the fact or after the fact
Integrity comes expensive
Vested interests dangerous

8. Trends in ratings industry
Criticism: how valid?
Where focus is needed
What the realities are
Possible outcomes
Real concerns
The need for freedom-at-a-price

9. Development banks Weaknesses Strengths General picture
Dangers of high expectations
Sticking to the knitting

10. Recommendations You want a formal rating? Where focus is needed
What the tough parts are
Slowly does it
Grow up rather than fall down
Realism required

11. Rating methodologies How valid? What the analysts need to know
How to help them and why
Possible new ideas, better methods
Difficulties
Understandable jaundice

12. Ratings Afrika’s views
Assessment of the impact of the financial crisis on the ratings industry
Where attention is needed
Some bad news and possible outcomes
The way forward
New horizons