Credit Rating .


Credit rating as an opportunity for your company

The importance of ratings when assessing a company's creditworthiness has increased substantially in recent years, not least as a result of the new capital adequacy requirements for banks set out in Basel II.

Internal ratings-based approaches have since been used by banks as part of their decision-making process when granting loans. The aim here is to better assess the risks inherent in the lending business and to structure the banks' capital to more appropriately reflect that level of risk.

When assessing the creditworthiness of a company with a ratings-based approach, both the financial ratios and the qualitative aspects of your company are included. The data is summarised using a complex valuation process. Individual areas of analysis are weighted differently according to the company's field of business (production, trade or service) and company size, thus determining the default risk which is described as a statistical probability of default. This results in a statement on the company's future ability to fully repay interest and principal on its obligations in due time.

In addition to risk-based loan conditions there are other effects your company can use. Several economically relevant factors are identified and given a risk weighting during the creditworthiness assessment. This reveals your company's strengths and weaknesses, and thus its opportunities and threats. The outcome will enable you to look for solutions to improve the creditworthiness of your company. An intensive dialogue plays an important role in all this. It opens up the potential for

  • Identifying opportunities for and threats to your company through improved rating transparency
  • Supporting your management control by implementing controlling and risk management systems
  • Actively improving rating-relevant ratios and thus shaping loan terms

Go for it: use the challenges of Basel II and rating as a way forward!

We would be happy to provide you with more information on Basel II and our rating approach in a personal meeting.


Landesbank Baden-W├╝rttemberg
Am Hauptbahnhof 2
70173 Stuttgart

Tel.: +49 711 127-0
Fax: +49 711 127-43544