 |
 |
|
News & Events |
|
|
|
 |
|
Press Releases |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Media Relations |
|
|
|
We are always interested in speaking to members of the media on news and events affecting the world of corporate credit risk. We look forward to hearing from you.
Contact Media Relations Representative |
|
|
|
|
|
|
|
|
For Immediate Release
Moody's KMV Launches First South African Private Firm Risk Assessment Model
The four leading banks in South Africa, Absa, FirstRand, Nedbank and Standard Bank, provided private firm data enabling creation of RiskCalc South Africa
SAN FRANCISCO, July 11, 2005 - Moody's KMV, the world's leading provider of quantitative credit-risk measurement and management solutions to lenders, investors and corporations, today introduced the first commercially available South Africa-specific default prediction model for private firm borrowers. The four major banks in South Africa, in a project initiated by Rand Merchant Bank (RMB), the investment arm of FirstRand, pooled together private firm data that enabled the development of the model. The Moody's KMV Credit Research Database team standardized the South African dataset on which the model is built, utilizing its extensive global experience in 21 countries. Simulations suggest that by using Moody's KMV RiskCalc ® v3.1, some medium-sized financial institutions could see their revenues improved by millions of dollars based on improvements in loan origination and monitoring practices and non-financial corporations could realize substantial value in assessing creditworthiness of customers and suppliers.
"Moody's KMV is adding value to the local credit market by introducing a transparent tool that pairs forward-looking, equity market-based credit cycle predictors updated on a monthly basis with crucial, South African firm-specific data to yield Expected Default Frequency credit measures," said Andrew Huddart, President of Moody's KMV. "These default probability credit measures provide a common metric for banks, investors and corporations to communicate with regulators and to characterize loan portfolios for asset securitization."
"Default probabilities are a key input into our core business - loan origination, pricing, reserving, limit setting, performance measurement and economic capital calculation and allocation. Adjusted versions of vendor models were previously used to measure credit risk for private firms, but by using RiskCalc South Africa, local banks can now have more comfort that the ranking and calibration of default probabilities assigned to private firms on a portfolio basis, are more realistic. It also constitutes a major milestone in the banks' preparation for Basel II compliance," said Rautie Nel, Head of Wholesale Credit Risk Measurement, Rand Merchant Bank.
RiskCalc v3.1 enables users to originate more efficiently (thousands of private companies may be assessed in minutes); model risk by country and sector; determine debt terms and pricing; identify early warning signals; quantify in a common framework true risks for internal and external discussion and concentrate limited analyst resources where most needed. The measures can also be incorporated into valuation and portfolio models, improving the precision of credit risk management. Corporations, like financial institutions, will use it to rate and assess counterparty risk.
Moody's KMV RiskCalc is comprised of a global network of 21 country-specific models, representing 80 percent of the world's GDP. In addition to over 200 clients worldwide, RiskCalc has been used as the basis for more than 150 collateralized loan obligations.
RiskCalc South Africa will be unveiled at an event in Johannesburg on Thursday, July 14. Moody's KMV anticipates an enthusiastic reception as the secondary market for SME loans develops, the regulatory environment evolves and bank shareholders demand superior performance.
About Moody’s KMV
Moody’s KMV, a wholly owned subsidiary of Moody's Corporation, is the world’s leading provider of quantitative credit risk analysis tools to lenders, investors, and corporations. Moody’s KMV's tools provide current default probabilities, recovery estimates, valuations and correlations, and are widely used to assess portfolio risk/return. Serving over 2,000 clients in 80 countries, including most of the world's 100 largest financial institutions, Moody’s KMV maintains the largest and cleanest database of corporate defaults in the world. In addition to its San Francisco headquarters, Moody’s KMV has offices around the world to serve its global customer base.
About Moody's Corporation
Moody's Corporation (NYSE: MCO) is the parent company of Moody's Investors Service, a leading provider of credit ratings, research and analysis covering debt instruments and securities in the global capital markets, and Moody's KMV, the leading provider of market-based quantitative services for banks and investors in credit-sensitive assets serving the world's largest financial institutions. The corporation, which reported revenue of $1.2 billion in 2003, employs approximately 2,300 people worldwide and maintains offices in 18 countries. Further information is available at www.moodys.com.
About Rand Merchant Bank
Rand Merchant Bank (RMB) is one of South Africa's leading investment banks and is active in treasury, structured finance, project finance, corporate finance, mining and natural resources, private equity and selected international activities.
RMB has enjoyed uninterrupted profit growth since its formation in 1977, and has pioneered many innovations in the financial markets. It is the recognised leader in fields such as securitisation, PPPs (public-private partnerships), and the funding of BEE (Black Economic Empowerment) transactions.
RMB is the investment banking arm of FirstRand, one of South Africa's largest, publicly quoted financial services groups.
Back to 2005 Press Releases |
|
|
|
