Public information ratings are ratings based on publicly-available information. This would refer to data contained in annual reports, published news articles, and anything else that is available in the public domain. Some rating agencies do public information ratings to increase their rating coverage and also to entice specific companies to go for a full-blown, interactive rating. With a public information rating, there may or may not be a meeting with the key officers or management of the company and even if there is such a meeting, the coverage in terms of what is actually discussed is quite limited. To distinguish a public information rating from a full-blown credit rating, sometimes a suffix like (pi) is added.
A full-blown, interactive credit rating, on the other hand, has the full cooperation of the company. Confidential information is made available to the rating agency and the rating analysts meet with the management team to discuss specific issues. An interactive credit rating is usually obtained for fund-raising, benchmarking, and other particular purposes.
An interactive credit rating is always more meaningful than a public information credit rating. Analysts can make a better judgement of the company or issue’s creditworthiness as significant information is made available. Management quality can be assessed by way of the management meetings. Sometimes, the point is raised whether there is any use to public information credit ratings. It may still be useful though as a quick indicator of a company’s credit standing and may also help a rating agency in terms of prospecting. From a company’s standpoint, however, going for an interactive credit rating increases the likelihood that the assigned credit rating will be more reflective of its credit standing.
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