About Ratings Enrichments

Reference Data Center Package Content enrichments enables you to choose one of four ratings selection methods to set the Gold Copy value:

• Best Rating (lowest numerical value)
• Worst Rating (highest numerical value)
• Second Best Rating
• Average Rating

About Ratings Methodology

Each rating has a unique methodology that is used to determine its value. This section provides an explanation on the methodology used for rating.

Best Rating

The Best Rating methodology selects the rating which has the lowest numerical rating across all sources and sets it as the Gold Copy value. If two rating have the same numerical rating, then the first source selected in the hierarchy will be used.

For example:

Hierarchy

 Composite Rating List

Data

Security 1 – The Moody’s rating of Aa1 (2) was selected since it has the lowest numerical value.  The numerical value of 2 was selected from the composite rating list and the associated alpha rating of AA+ was also selected.

Security 2 – The Fitch rating of AA (3) was selected since it has the lowest numerical value.  The numerical value of 3 was selected from the composite rating list and the associated alpha rating of AA was also selected. 

Worst Rating

The Worst Rating methodology selects the rating which has the highest numerical rating across all sources identified in the hierarchy. If two ratings have the same numerical rating, then the first source selected in the hierarchy will be used. 

For example:

Hierarchy

Composite Rating List

Data

Security 1 – The S&P rating of BBB (9) was selected since it has the lowest numerical value.  The numerical value of 9 was selected from the composite rating list and the associated alpha rating of BBB was also selected.

Security 2 – The Moody’s rating of Aa2 (3) was selected since both the Moody’s and the S&P rating has the same numerical value and Moody’s is higher in the hierarchy.  The numerical value of 3 was selected from the composite rating list and the associated alpha rating of AA was also selected.

Security 3 – The Moody’s rating of Ba1 (11) is selected since it has the lowest numerical value.    The numerical value of 11 was selected from the composite rating list and the associated alpha rating of BB+ was also selected.

Second Best Rating

The Second best methodology selects the rating which is the second highest numerical rating of a group. If all ratings that have been received have the same rating, then this methodology selects the rating based on the hierarchy order. If there are three ratings, and two of the ratings match, the first rating in the vendor hierarchy that matches one of these two ratings is used. 

For example:

Hierarchy

Composite Rating List

Data

Security 1 – The Moody’s rating of A3 (7) was selected since it is the middle value between the three ratings.  The numerical value of 7 was selected from the composite rating list and the associated alpha rating of A- was also selected.

Security 2 – The Moody’s rating of Aa2 (3) was selected since both the Moody’s and the S&P rating has the same numerical value and Moody’s is higher in the hierarchy.  The numerical value of 3 was selected from the composite rating list and the associated alpha rating of AA was also selected.

Security 3 – The Moody’s rating of A2 (6) was selected since both the Moody’s and S&P Ratings has the same numerical value and Moody’s is higher in the hierarchy.  The numerical value of 6 was selected from the composite rating list and the associated alpha rating of A was also selected.

Security 4 – The Moody’s rating of Ba1 (11) is selected since only two ratings were received and the Moody’s rating is the most conservative rating.    The numerical value of 11 was selected from the composite rating list and the associated alpha rating of BB+ was also selected.

Security 5 – The Fitch rating of AAA (1) is selected since it is the only rating received.    The numerical value of 1 was selected from the composite rating list and the associated alpha rating of AAA was also selected. 

Average Rating

The Average Rating methodology calculates the average rating based on the valid ratings.  The Average Rating methodology rounds the calculated rating to the nearest whole number using a “round half away from zero” methodology. This will round a calculated number of 2.5 to be 3 and 4.3 to be 4. After calculating the average numerical rating of the sources, this methodology will also look at a Gold Copy specified code category to find the closed match of equal or lesser value.  The process will then assign this numerical and related alpha value to the composite rating. 

For example:

Hierarchy

Composite Rating List

Data

Security 1 – The rating of AA+ (2) was used since the average of all three ratings sources was 2.3, which is rounded to 2.  Since 2 matches a value in the code value list, the value of AA+ (2) was used.

Security 2 – The rating of A- (7) was used since the average of all three ratings sources was 6.6, which is rounded to 7.  Since 7 matches a value in the code value list, the value of A- (7) was used.

Security 3 – The rating of BBB (9) was used since the average of the two ratings received was 9.  Since 9 matches a value in the code value list, the value of BBB (9) was used.

Security 4 – The rating of AAA (1) is used since only one rating source was present and the value of 1 matches a value in the code value list.