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Japan Credit Rating Agency (JCR)

What is Japan Credit Rating Agency (JCR)

The Japan Credit Rating Agency (JCR) is a Japanese financial services company that provides credit ratings for the corporate debt of Japanese companies and foreign bond issuers. The entity also publishes various financial and economic information and serves as a guide to counterparty credit risk.

key takeaways

  • The Japan Credit Rating Agency (JCR) is Japan’s leading credit rating agency, providing ratings to Japanese corporate and financial bond issuers.
  • JCR also provides rating guidance to more than 200 foreign issuers.
  • In addition to providing rating guidance, JCR is a source of regularly published economic and financial research.
  • JCR provides rating guidance to over 60% of Japan’s 1,000 publicly rated corporate issuers and over 70% of the financial sector.
  • JCR was officially registered as a nationally recognized statistical rating agency in the United States in 2007 and was accredited in the European Union in 2011.
  • JCR uses two rating scales; one long and one short, and the long-term rating scale is similar to that of Standard & Poor’s and Moody’s.
  • JCR has been expanding its global network, forming alliances with foreign credit rating agencies and being approved as a credit rating agency in several countries.

Learn about the Japanese Credit Rating Agency (JCR)

The Japan Credit Rating Agency (JCR) is one of Japan’s major bond rating agencies and rates the vast majority of Japanese corporate debt, including asset-backed securities. It provides several services, including rating all types of debt securities and publishing financial market, economic and industry research, as well as providing data-as-a-service. JCR was established in April 1985.

Since its establishment in 1985, JCR has weathered multiple financial crises, including the Japanese real estate bubble, the Asian financial crisis, the 2007-08 financial crisis, the European sovereign debt crisis and the East Japan tsunami, and considers itself an expert in credit risk analysis.

Over the years, JCR has been expanding its global network, building relationships with many different countries and forming alliances with different organisations such as the Association of Credit Rating Agencies in Asia (ACRAA), VIS in Pakistan, CARE Ratings in India, HR Ratings in Mexico and MARC in Malaysia.

Responsibilities of the Japanese Credit Rating Agency (JCR)

JCR provides rating guidance to more than 60% of Japan’s approximately 1,000 publicly rated issuers. In addition, JCR provides rating coverage for more than 70% of Japan’s financial sector, and it also dominates the healthcare and education sectors.

JCR responds to globalization and the demand for international rating agencies by bond issuers and investors. Its ratings are used in major overseas markets such as the US, Europe, Turkey, Hong Kong, Indonesia and Thailand, and more than 200 foreign issuers have been assigned credit ratings. JCR was officially registered as a nationally recognized statistical rating agency in the United States in 2007 and was accredited in the European Union in 2011.

Some of the additional services JCR provides to its clients include networking, private credit assessments, credit risk estimation modelling, green and social finance assessments, seminars and training, economic and industry information, and research and knowledge sharing.

The company also provides details of all rating methods on its website, detailing its processes and policies. It divides its rating methodology into five distinct groups, namely corporates, financial institutions, public sector, structured finance, and sovereign and supranational.

Japan Credit Rating Agency (JCR) Rating Scale

JCR has two rating scales used to rate debt issuances: the Long Term Rating Scale and the Short Term Rating Scale. Long-term rating scales are similar to those used by Western credit rating agencies such as Standard & Poor’s and Moody’s.

Long-term ratings range from AAA to D, with AAA representing the highest level of quality and D representing default. For rating symbols between AA and B, a plus or minus sign may be appended to indicate that the issuer is within that rating.

JCR’s short-term ratings range from J-1 to J-3, with two more ratings below that: NJ and D. In this case, D also means default, and J-1 is the highest quality level.

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