Bank of France raises corporate credit rating threshold for first time in 40 years
The Bank of France has raised the corporate credit rating threshold from EUR 750,000 to EUR 1.25 million for the first time in 40 years, effective January 2025. This adjustment aims to align the rating system with economic changes and focus on larger companies. The new threshold will exclude some small and medium-sized enterprises (SMEs) currently rated by the bank.
ANI
Dec 13, 2024 15:02 IST
Paris [France], December 13 (ANI/WAM): The Bank of France has announced a major adjustment to its corporate rating system, effective January 2025. For the first time in 40 years, the turnover threshold required to qualify for the bank's rating will be raised from EUR 750,000 to EUR 1.25 million.
The announcement came during a press conference where Emilie Quema, Director of Entreprises Department at the Bank of France, explained that this adjustment is intended to adapt the system to changes in the economic environment while focusing resources on larger companies.
The Bank of France rating system assesses the ability of companies to meet their financial obligations over a period of one to three years. Unlike private credit rating agencies such as S&P or Moody's, the bank provides these ratings for free.
These ratings are confidential and based on comprehensive data collected from official records, tax filings, and company accounts. The information is stored in a database called "Fiben," which allows the bank to assign a letter indicating the company's turnover size and a number reflecting its creditworthiness.
The decision to raise the turnover threshold means that approximately 7 per cent of companies currently rated by the bank--primarily small and medium-sized enterprises (SMEs) with turnovers between EUR 750,000 and EUR 1.25 million--will no longer qualify for a rating, as the rating often influences trade credit insurance and payment terms. (ANI/WAM)
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