Accounting, Finance, SPSS Assignment: Kroll Bond Rating

(Student’s name)
(Professor’s name)
Accounting, Finance, SPSS
10 November 2017
Kroll Bond Rating
A lot of small business are working extensively daily to keep their operations alive. It all starts from customer relations and vendors to knowing the top marketing strategies to sell their goods and services. An extra effort is done by thriving businesses to improve their business credit rating. Hence, it is obviously a significant factor in finance access to start supporting a business. Jules Kroll is a thriving company that is planning to enter the credit rating business and that will be discussed here because there are several factors that may contribute to its downfall or success.
1.
Entering the credit rating business is definitely a good idea, but this is not the best time to do so because according to the information provided, there is no significant change in the rating. For instance, Moody’s business in 2009 only received half of its revenue from the US market because other reports were from corporate finance, structured finance, institutions, and other areas. This is an indication that market response is not enough to make business flourish.
Another reason is that, in 2007 there was a rise in the prices of homes then it leveled until it finally went down. However, it was also the year when structured securities started to decline. The movement of the rates were also slow since that time, which meant that securities related to mortgage had to be decreased since 2007.
The investors experienced unexpected losses led to a lot of criticism. This is something that Jules Kroll might experience if they push through with their plan right away. It is a good idea to observe the movement of the ratings before starting anything and it should have consistency as well.
2.
The incumbent ratings fell because they became dependent on fees given by issuers that are models of the issuer pay. There was no agreement in terms of interest and that the agencies are more into business generation from firms that look for the rating. This is conflicting to providing honest ratings. In addition, the internal mechanisms to protect credit analysts about the fees were ineffective. The smaller business got theirs from the subscriptions paid by investors, and this means that the idea of investors paying are less vulnerable to disagreements in interest. Switching to this idea could turn the subscription rating into a product, and will no longer belong to the public. This causes a conflict the investors and policy makers to look for the availability of ratings, so the market will have an opportunity to judge their performances. The rating of the current businesses fail because of these reasons and pressure from regulations can also be found outside the US.
This has an impact on the opportunity of Kroll to succeed because if they will become reliant on the payment of the issuer...