Rapid Ratings Research Products Now Available
January 28, 2005
Rapid Ratings Research Products Now Available on Thomson ONE’s First Call and Investext Research Portals
Rapid Ratings, a leading, independent provider of global corporate credit and equity risk-rating research is pleased to announce that core subsets of its US equity and credit risk research products will soon be available on Thomson Financial’s ‘First Call’ and ‘Investext’ research distribution portals. Rapid Ratings is a member of the ‘Investorside Research Association’ in Washington DC.
Rapid Ratings is currently producing Equity Valuation and Credit Risk Reports on approximately 1,660 US companies. “The availability of our research on the Thomson ONE platform will greatly expand our distribution capabilities and provide our products with brand exposure to a global audience of 30,000 portfolio managers, traders, analysts, risk managers and investment advisors,” said Dr Patrick Caragata, the CEO and founder of Rapid Ratings.
Dr. Caragata, a Canadian and New Zealand citizen and a permanent resident of Australia with a Ph.D from the University of Toronto stated that, “as a result of recently-implemented regulatory policies, the largest US investment banks are now required to include independent second opinions, chosen by independent consultants named by US regulators, when offering clients advice on equities that their own research departments cover. Rapid Ratings is significantly growing its business in this area.” Rapid Ratings’ business partners in the US include the Bank of New York Jaywalk and Income Securities Advisors in Miami Lakes.
He said, “leveraging the distribution strength of Thomson ONE research portals will provide Rapid Ratings expansive exposure to fund managers. This is an ideal platform to introduce our research products that are specifically designed to support buy-side investment strategies. We package our product sets to address capital structure arbitrage, long/short equity, convertible arbitrage, high yield/distressed and special situations.” Dr. Caragata concluded, “Clearly, our product sets and marketing initiatives will specifically target hedge funds and asset management firms. The scope of our coverage, research models, processing infrastructure and product packaging differentiates our offering from competitors and enables Rapid Ratings to create discreet data and research services that supports specific fund managers strategies and investment styles. In this respect Rapid Ratings is truly unique.”
The Rapid Ratings’ software has successfully picked up early signals of distress in a number of prominent companies. For example, the Rapid Ratings model was able to identify Enron’s weak position based on its financial accounts from 1997, 1998, 1999 and 2000. The Rapid Ratings model identified Enron as below investment grade with a high probability of default using nothing but the company’s P&L and Balance Sheet statements. According to Dr. Caragata, “We find that, in most cases, our credit risk scores are very reliable indicators of a company’s financial fundamentals and act as an early warning system of deterioration and turnaround. In contrast, the share price can often contain a good deal of market hype and it can lag a company’s fundamental financial performance. By combining the two, we can see whether a share price is trending in the same direction as a company’s fundamental position. It’s amazing to find how many stocks run hot or cold purely on market sentiment as opposed to their fundamental financial position. We use these divergences in trend to generate the investment decision support signals in our Composite Risk Reports. Rapid Ratings plans to increase the number of US stocks covered by the Composite Risk Reporting service to around 8,000.”
At the heart of Rapid Ratings’ research are 25 industry-specific quantitative based models that generate credit risk ratings for approximately 15,000 global companies. Rapid Ratings utilizes publicly available financial data as inputs to generate a risk rating. Each industry model employs 62 financial ratios and a sophisticated multivariate econometric global benchmarking system. The models include a database of over 250,000 companies that reference 25-30 years of financial data.
Rapid Ratings’ Background
Rapid Ratings is producing research on listed and unlisted companies in the US, Canada, Singapore, Australia and New Zealand for investment funds, brokers, banks, large creditors, financial planner networks, financial advisors, accounting firms and retail investors. In Singapore, Rapid Ratings recently signed an agreement with the Securities Investors Association of Singapore (SIAS) to distribute its equity risk reports to members. SIAS provides independent research and investor education for its 63,000 retail members. Rapid Ratings has a similar arrangement with the Australian Shareholders’ Association.
Rapid Ratings is 73% owned by Collection House Limited, an Australian company that is listed on the ASX. Rapid Ratings has offices in New York, Toronto, Singapore, Sydney, Wellington and Brisbane.