A credit rating can have a significant impact on a borrower's cost of financing. It is therefore essential for an issuer to obtain the best possible rating to improve its cost of financing.
The role of the rating advisory department is to facilitate the relationship between issuers and rating agencies in order to obtain the best possible rating for the client so that the latter can borrow under optimal conditions.
The objective is to help the company to highlight its strengths and assist it in its weaknesses.
At the beginning, a "credit story" is written. It requires a thorough study of the company's accounts (balance sheet, income statement) but also on the regulatory environment of the studied sector, the strategy, etc... It also involves comparing the company to its competitors. It is a financial analysis of the company.
It is also necessary for the company to take into account the expectations of bond investors (duration, amounts, liquidity, structure) so that the security is attractive.
This will result in a rating book.
Of course, the department works closely with coverage, bond syndication, the DCM and ECM department (primary debt and primary equity), and structured finance, including acquisition financing.