ARC Rating takes new approach to credit rating, old methods no longer sufficient

Malaysian Rating Corp Bhd chief executive officer Mohd Razlan Mohamed.

PETALING JAYA: ARC Ratings SA, a new Europe-based rating agency which counts Malaysian Rating Corp Bhd (MARC) as one of its founding partners, has said it will take an innovative approach to credit rating that will provide a much-needed shake-up of the industry.

In a statement issued yesterday, ARC said its five founding partners believed that the old methods and approaches were no longer sufficient. It is taking on established players – Fitch Ratings, Standard & Poor’s and Moody’s Investors Service – by doing away with ratings that distinguish between “investment grade” and “non-investment grade” debt. ARC claims its methodology willbe dynamically adapted to keep pace with market needs according to the different levels of risk.