CRIF Ratings publishes its rating methodology for small and medium non financial corporations (SME Corporate)

CRIF Ratings announces that the consultation period started on 3 October 2018 on the introduction of a new rating methodology focused on Small and Medium non financial corporations (SME Corporate segment) expired without any feedback from market participants. Hence, the new rating methodology to assess the creditworthiness of SMEs is valid and applicable starting from 7 December 2018 according to the guidelines reported into the "SME Corporate Rating Methodology".

The SME Corporate methodology is applicable to all the non-financial Small and Medium Enterprises established within the European Union (‘EU’) whose financial statements were updated within the last 24 months and whose total turnover is comprised between EUR 5 million and EUR 75 million. 

The time horizon of the assessment is the medium long term. As such, SME ratings are considered as Long Term Issuer Rating and they can be solicited by the rated entity (or by a related third party) or issued on an unsolicited basis (i.e. required by a third party or issued on CRIF Ratings own initiative). The SME rating process does not foresee the participation of the rated entity as it is based solely on public information (financial statements and other information retrieved from Chambers of Commerce, public real estate registries and Courts) and on other proprietary information within the databases of CRIF group.

The SME rating scale has eight categories with increasing level of riskiness (from ‘SME1’ to ‘SME8’) and one default class (‘DF’), which identifies issuers who have filed for an insolvency proceeding in accordance to the European Insolvency regulation (EU 2015/848 of the European Parliament and of the European Council and subsequent modifications).

Besides the new SME Corporate methodology, the existing Corporate Rating methodology, issued on 12 June 2018 ("Corporate Rating Methodology"), remains valid and applicable to all the non financial corporations headquartered within the EU (i) whose total turnover is above EUR 75m or (ii) whose  total turnover is below EUR 75m but the rating process include the participation of the rated entity.