New Ratings Arrives, Will Do Nothing To Keep Others Honest

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There are apparently companies without the resources to buy triple-A credit ratings from the Big Three. A little fourth has arrived to help, but plans to studiously avoid stepping on larger incompetent toes.

On Thursday, five credit rating agencies in Portugal, Brazil, India, Malaysia and South Africa introduced Arc Ratings, a service they think will give up-and-coming companies access to the capital markets outside their home countries….

They think they will succeed by focusing on the next generation of large companies by offering them access to international capital.

Midsize companies in the emerging markets have been “a segment insufficiently covered and served by the incumbents,” said José Poças Esteves, the chief executive of Arc Ratings….

Arc Ratings hopes to alleviate those concerns by creating a different style of rating that does not focus on whether a debt offering is investment grade, but on the level of potential risk of default, said Uwe Bott, the company’s chief ratings officer and a former executive at GE Capital….

Arc Ratings does not plan to issue ratings in the United States.

“Ratings have been around since 1909,” Mr. Bott said. “It’s time for a change.”

New Ratings Agency Hopes to Compete With Big 3 Outside U.S. [DealBook]

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