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DataPro, AIHN to Host Webinar on ‘Credit Rating Imperatives for Issuers, Investors Post Covid’

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DataPro is set to host a live webinar on Thursday, 14th October, 2021 at 3pm – 4.30pm, in conjunction with the Association of Issuing Houses of Nigeria (AIHN).

The theme of the webinar is: Post-Covid Economic Recovery: Credit Rating Imperatives for Issuers & Investors.

DataPro was licensed as a Credit Rating Agency (CRA) in Nigeria in 2004 by the Securities & Exchange Commission (SEC).

Having operated as a Business Information Company and a pioneer in Compliance Consulting since the inception of the company in 1995, becoming a Credit Rating Agency about a decade later was a natural progression.

The Business Model adopted by DataPro when it was established in 1995 was essentially made possible by the Dun & Bradstreet franchise secured at inception.

Dun & Bradstreet (D&B) historically is credited to be one of the pioneers of the Credit Rating Business in the world as far back as 1859 when one of its founders Mr. Robert Dun published the First Rating Guide in the US, while his partner Mr. John Bradstreet established a Credit Rating Agency.

DataPro’s affiliation with Dun & Bradstreet for more than 10 years between 1995 and 2006 therefore provided it with the needed knowledge, skills and understanding of how Credit Rating works.

Even though the firms operate today as a multi-disciplinary and multi-dimensional group involved in Credit Rating, Compliance Solutions, Data Protection and Business Information Service, its services and products benefit from the expertise across board making it unique.

AIHN BACKGROUND

The Association of Issuing Houses of Nigeria (AIHN) is a self-regulatory body for Investment Banks registered by Issuing Houses operations by the Securities & Exchange Commission (SEC) to perform issuing Houses functions.

AIHN is the Trade Group within the SEC of Bank and Non-Bank owned Investment firms.

THE WEBINAR OBJECTIVES

·         To bring to the fore the important role Credit Rating Agencies play in Economic Recovery efforts following the New Normal post Covid interventionist policies of the Government.

·         To enlighten the key stakeholders in the Capital Market about new and emerging trends, patterns, risks and opportunities within the Credit Rating Industry.

·         To espouse the potentials of Credit Rating Agency in developing the capacity of MSMEs in fulfilling their role in economic development.

·         To develop the market for Solicited and Unsolicited Ratings in Nigeria.

·         To showcase our FinTech Rating Solutions, “New Look” Rating Report and Rating Guide Platform.

VALUE PROPOSITION OF CREDIT RATING

A Credit Rating Agency evaluates the creditworthiness of Obligors.

The Rating Report serves various purposes and attends to varied audiences/clientele. For the Investors, the Rating is an information service, communicating the relative ranking of the default loss probability for a given fixed income investment in comparison with other rated instruments.

The Rating Agency therefore helps ensure efficient allocation of resources through systematic risk evaluation.

Institutional Investor Rating provides a low-cost supplement to their own in-house appraisal system. They use the information provided by Rating changes to alter portfolio mix in the secondary market.

Banks in some developed countries also used Ratings of other banks and financial intermediaries for their decisions regarding inter-bank lending, swap agreement and other counterparts risk.

The benefit of Credit Rating for Issuers stems from the faith placed by the market on the opinion of the Rating provided and the widespread use of Ratings as a guide for investment decisions.

The Issuers of rated securities will have access to a much wider investor base as compared to unrated securities. The opinion of a Rating Agencies enjoying investor conference could enable the Issuers of highly rated instruments to access the market even under adverse market conditions.

Credit rating also provides a basis for determining the additional return (over and above a risk-free return) which investors must get in order to be compensated for the additional risk they bear. This is a very useful benchmark for Issue pricing.

The differential in pricing would lead to significant cost savings for highly rated Instruments.

Intermediaries Rating is a very useful tool for Investment Banks, Merchant Bankers and other Capital Market Intermediaries in the process of planning, pricing, underwriting and placement of Issues.

Intermediaries such as Brokers and Dealers in Securities use Rating as an input in monitoring of their risk exposure. Regulators in any country specify Capital Adequacy rules linked to Credit Rating of Securities in a portfolio.

Regulators Regulatory Authorities worldwide have encouraged the use of Credit Rating by issuing mandatory requirements for Issuers.

Specific rules, for instance restrict entry to the market of new Issues rated below a particular grade and prohibit Institutional Investors from purchasing or holding of instruments rated below the particular grade.

The Credit Rating Agencies promote liquidity within the system by increasing the pool of potential borrowers, they also increase the supply of available Risk Capital (Venture Capital) in the market, thus promoting economic growth.

However, just as Nigeria is presently experiencing disruptions within various sectors of the Economy, the Credit Rating Industry is no exception.

DataPro has fully embraced these technological changes.

“We are known in the market for Transparency and Speed all thanks to our digital solutions and technological base. We have transformed into the first FinTech Credit Rating Agency in Nigeria with fully automated services using Algorithms, Big Data, Artificial Intelligence (AI) and Machine Learning,” DataPro said in a statement.

“This will enable us to deliver excellent services to all critical sectors and players all over the world interested in the Nigerian market.”

The firm announced that the program going forward will be an Annual event.

“We believe it will usher in a brighter future for the Capital Market and promote a fast acceleration of funding economic development in Nigeria,” DataPro said.

The target audience for the conference include: All Capital Market Operators, Investors, Mutual Fund Operators, Pension Funds Operators, Banks – DMB, Merchants, MFBs, Mortgage, Development Banks, Credit Guarantee Agencies, Insurance Companies, Private Equity Firms, Regulators, MSMEs and the General Public.

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