Baptista Research’s credit analysis reports are a representation of its view with respect to the relative credit risk associated with timely debt servicing by an entity. Our credit analysis approach involves a combination of a historical analysis as well as futuristic view of an entity and evaluating its ability to generate profitability and free cash flows in order to service the debt obligations. Baptista Research’s credit analysis is its very own proprietary assessment mechanism and it does not explicitly consider the loss expected to be borne by any specific investor or lender in the event of a default or liquidation or bankruptcy of an entity. This is why Baptista Research’s credit reports focus on companies/ issuers and not specific instruments and they do not differentiate among debt instruments in terms of their secured or unsecured nature. Since our scores are dedicated to companies and not specific instruments, we do not factor in the liquidation preference, seniority and other contractual features of any specific instrument.
Our Credit Evaluation and Financial Strength Indicator cover all forms of corporate debt including bank loans, debt instruments such as bonds and non-convertible debentures, corporate deposits, and commercial paper.