Enhancing Credit Ratings to Build Confidence in the Thai Bond Market

Bonds serve as vital financing instruments for both public and private sectors. With such significant values at stake, investment decision tools become crucial, particularly Credit Ratings issued by Credit Rating Agencies (CRAs). Companies seeking to raise funds through bonds must engage CRAs to assess their credit ratings (the Issuer-Pays Model). These ratings influence bond yields and play a key role in attracting investors. However, recent market experiences have shown that credit ratings don’t always capture the full spectrum of risks. Cases of “Fallen Angels” – where bonds face severe downgrades – have demonstrated how rating changes can significantly impact both individual securities and broader market confidence.

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