In business, economic data is analyzed by conducting an analysis of the financial statements for information processing and evaluation. Tendency statements are made as well as taking into account qualitative, forward-looking factors (eg the potential of human capital). A rating classification is then made based on the input of cloud bookkeeping New Zealand service providers.

As a result, the banks takes account of risk factors are similar to those of the major rating agencies. They take into account the financial situation, market position and management quality. A long-standing relationship with the borrower (bank relationship) may give banks an information advantage over credit rating agencies, which only have external information.

Exempt from the prospectus requirements include cooperative shares, pension funds, private placements (up to 20 shareholders or minimum investment of NZ$200,000 or total investment of max. 100,000 dollars in 12 months or only to employees).

The statutory approval period is 20 business days for an initial public offering and 10 business days for securities that are already publicly traded or have been admitted to a regulated market. The prospectuses initially filed with the applicable securities regulatory authority.

The authorities review and comment on the brochures. These comments are then incorporated by the issuer pursuant to the Prospectus before it is sent back for final review.

Credit rating in business

The credit rating is a key criterion in the assessment of risk that an investment has, particularly in the context of financial markets. It is even one of the required criteria for institutional borrowers (pension funds, local authorities), whose statutes specify a minimum rating level for their investments.

It is essential to distinguish between the credit rating and risk assessment – customers, who may have the same goals (to deal with counterparty risk) but do not use the same resources. In addition to these external ratings, there are also internal rating systems, made by banks for their own use, based on statistical data in their possession.

The rating companies are now highly criticized for their lack of foresight to recognize the systemic problems and to measure the strength of companies and institutions noted in cases of national or international deteriorating markets. New systems of risk assessment are under consideration.

New agencies appear to offer their own rating system which takes into account not only the creditworthiness of borrowers but also the long-term profitability of the operations. In practice, the authorized agency has access to all documents. The initial process takes several weeks of contacts and intensive analysis, after which the agency gives a rating to the client.