Holding Company Rating

Holding companies are entities whose primary activity is holding controlling and non-controlling stakes in private or publicly traded companies, for the purpose of generating capital gains and/or dividend income. The need for a separate framework for rating of holding companies arises to account for the unique risks emanating from their investment portfolios and its impact on their credit quality. While some holding companies’ activities are restricted to holding stakes in investees, others have their own operations as well. The rating in both cases uses the Holding Company methodology, however, in case of the latter, the relevant sector methodology or PACRA’s Corporate Rating methodology provides the support.