Question

give examples of credit rating agencies in Jordan? are rating agencies paid by the companies they rate, do rating agencies act as consultants to the company they rate?

Answer 1

Examples of credit rating agencies in Jordan are AM Best, Capital intelligence rating, Islamic International Rating Agency and moody's

Rating agencies are paid by the companies they rate, because in financial world for taking new debt, financial institutions ask for company rating to understand the risk associated with particular company and sometimes it become mandatory for companies to be rated. Even some financial instruments like bonds, debentures, commercial paper etc are mandatory to be rated by rating agencies to be issued by companies.

Rating agencies do not act as consultant to the company they rate for taking new debt by the company, however rating agencies have different verticals where they provide research facilities or other type of activities (but not consultant for arranging debt) to the companies. These companies may be or may not be rated by them.