Credibility is capital. A company that can show lenders a rating, a score, a sound risk framework and a board that governs is a company that pays less for its money — and finds money when others cannot.
Rating advisory
Preparing issuers for Moody’s, S&P and Fitch — and for the questions they will ask.
Orion’s partners have spent their careers on both sides of the rating table. Nicolas Photiades worked as a rating analyst for one of the larger US rating agencies and as a senior rating advisor for European, MENA and South-East Asian corporates and financial institutions; in 2011 he advised a major Riyadh-listed corporate on obtaining its first rating — the first rating-advisory mandate awarded to a Lebanese financial institution by such a client. Dr. Ghassan Chammas brings senior rating-agency experience and deep expertise in the rating and scoring of Islamic banks and sukuk, and worked alongside Nicolas Photiades on the development of a European rating agency.
Orion helps the issuer’s team compile the quantitative and qualitative information, answer the agency’s requests, and — above all — prepares management to articulate the company’s strategy, its qualitative strengths and the story behind its financials.
Why a rating matters
A rating is the passport to the capital markets: it is the prerequisite for a first bond or sukuk issue, it sets the price investors will demand, and it opens the door to institutional investors whose mandates forbid unrated paper. It also disciplines the issuer — the annual review forces transparent reporting and consistent strategy. Thorough preparation for the first rating sharply reduces the workload of every annual review that follows, and Orion’s knowledge of each agency’s methodology lets it anticipate where the analysts will press.
For sovereigns and sub-sovereigns below investment grade, Orion’s research series Sixteen Sovereigns, One Scale sets out what separates a sovereign that still chooses from one that merely manages its timeline — and what it takes to move up.
The rating process
A first rating typically takes 12 to 14 weeks, including the four to six weeks the agency needs to analyse and determine the rating.
- 1
Preparation for the rating presentation
Compiling quantitative and qualitative information; rehearsing management on strategy and financials.
- 2
Rating agency meeting
Management presents to the analysts; follow-up questions and data requests.
- 3
Rating committee
The agency’s committee assigns the rating. An appeal is possible where justified.
- 4
Communication to the issuer
The rating and its rationale are communicated to the issuer or borrower.
- 5
Public dissemination
The rating is published — except for private ratings, where the process stops at the previous step.
- 6
Ongoing surveillance
The agency monitors the rating; thorough initial preparation lightens every annual review.
Long-term issuer rating scales
The three major agencies’ long-term scales, side by side.
| Moody’s | S&P | Fitch | Meaning | Grade |
|---|---|---|---|---|
| Aaa | AAA | AAA | Extremely strong capacity to meet commitments | Investment grade |
| Aa1 – Aa3 | AA+ – AA− | AA+ – AA− | Very strong capacity | Investment grade |
| A1 – A3 | A+ – A− | A+ – A− | Strong capacity, somewhat sensitive to adverse conditions | Investment grade |
| Baa1 – Baa3 | BBB+ – BBB− | BBB+ – BBB− | Adequate capacity; adverse conditions more likely to weaken it | Investment grade |
| Ba1 – Ba3 | BB+ – BB− | BB+ – BB− | Less vulnerable in the near term; faces major uncertainties | Speculative grade |
| B1 – B3 | B+ – B− | B+ – B− | More vulnerable; capacity depends on favourable conditions | Speculative grade |
| Caa | CCC | CCC | Currently vulnerable | Speculative grade |
| Ca | CC | CC | Highly vulnerable; default likely | Speculative grade |
| C | C | C | Extremely vulnerable; default imminent or under way | Speculative grade |
| — | SD / D | RD / D | Selective or general default | Default |
Risk, scoring and regulation
Measuring credit risk where the data is thin.
The partners have extensive experience in risk management and in Basel II and III implementation. Orion advised the Banque du Liban on loan-classification and debt-to-property swap regulations, and the Union of Arab Banks on Basel II, ratings and risk management, running workshops for its member banks.
Credit scoring has become a platform of its own within the group: Orion Scoring & Rating produces scores for banks, companies, insurers and retail borrowers from standard financial statements, with ESG and Sharia-compliance modules.
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Orion designs bespoke models for lenders: machine-learning retail credit-scoring and default-analytics models for consumer-finance companies, analytics for banks’ marketing and operations, a scoring system for retail banking products, and a rules-based corporate-governance scoring system that adapts to each industry. Every model is documented for validation and explained in terms a credit committee can use — which variables drive the score, and why.
Licensing and governance
Institutions that regulators trust and boards that govern.
Orion writes business models and obtains operating licences for financial institutions in different jurisdictions, and helps boards build the governance that lenders and regulators expect: charters, committees, policies and procedures, and the reporting that makes them real.
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The firm’s work with nineteen Lebanese manufacturers found the same weaknesses again and again: concentrated decision-making, unresolved succession across generations, rudimentary financial policies and no performance indicators. Orion’s governance work addresses these directly — a governance charter and board committees, delegation of responsibilities, succession planning, performance-based pay and a fair salary scale — because investors will not fund what they cannot see being governed.