The Best Time to Get a Rating
Quite recently, we have received a lot of inquiries from prospective companies looking to get a credit rating and this is quite unusual for the start of the year. When we talk to these prospective ratees, we find out that most of them want to do a rating because interest rates are quite low at present.
Will interest rates remain low for a reasonable amount of time? Your guess is as good as mine. The best time to get a credit rating then is when you don’t need it yet. That way, when an opportunity presents itself, you are ready to move.
Any rating agency which intends to do a good job will need some amount of time to complete its evaluation. Four to six weeks would be the norm in terms of processing time. Four to six weeks is a long time — interest rate-wise. It is possible that what appeared to be low rates at the start of the four weeks could be significantly higher by the time the rating is done.
So, as I was telling one of our prospects who wanted a rating quickly now to take advantage of the low rates: “You should have gotten a rating last year. Had you done that, you would be ready to float immediately at today’s rates.” Our contact agreed. Their company won’t wait till the last minute next time. Who cares if you do not need that rating today? A rating agreement typically covers a year anyway. Get that rating today so when that window of opportunity comes up, you are first in line.