Executive Summary
This document describes KBRA’s general rating methodology as it pertains to finance companies. For the purpose of this methodology, finance companies (FCs) are inclusive of companies that are not banks, but are active in providing various forms of financing to end users, both on a secured and an unsecured basis. Finance companies may, however, be owned by bank holding companies or other non-financial corporations as in the case of “captive” finance companies.
Finance companies encompass a range of business segments and industries globally. This rating methodology is intended to cover all such companies and focuses on a number of key operational, financial, and economic aspects that all FCs share. However, KBRA may consider other factors specific to a FC subsector in order to incorporate unique risks and other relevant business nuances.
The rating determinants include both business and financial risk indicators. The business risk indicators capture non-financial…