KOFIA’s 2024 Credit Rating Agency Assessment: NICE Investors Service Rated Most Outstanding Overall

NICE Investors Service Excels in Both Quantitative and Qualitative Assessments
"Proactive Risk Diagnosis and Diversified Communication Methods"

The Korea Financial Investment Association conducted a capability assessment of three domestic credit rating agencies this year—Korea Ratings·KR, Korea Investors Service, and NICE Investors Service—and found NICE Investors Service to be the most outstanding among them.

The association announced the "2026 Credit Rating Agency Capability Assessment Results" on June 9, following the deliberation of the Credit Rating Agency Capability Assessment Committee, chaired by Kang Kyunghoon.

Korea Financial Investment Association

The credit rating agency capability assessment covered two categories: the accuracy of credit ratings, which examined whether ratings were overestimated; and the stability of credit ratings and the usefulness of forecast indicators, which evaluated factors such as abrupt post-rating adjustments, inconsistent evaluation practices, and the practical value of forecast indicators (such as rating outlooks and rating watches).

The evaluation method was developed through discussions among expert task forces from academia, research institutes, and the financial investment industry. It consisted of a quantitative assessment (50%), which scored measurable indicators such as default rates and rating stability, and a qualitative assessment (50%), which was a survey of market experts.

The association stated that NICE Investors Service received the highest scores in both the quantitative and qualitative comprehensive evaluations.

In the quantitative assessment for the accuracy of credit ratings, NICE Investors Service recorded lower average cumulative default rates among companies rated A over the past three and five years—0.261% and 0.362%, respectively—compared to Korea Ratings·KR (0.374% and 0.268%) and Korea Investors Service (0.383% and 0.290%).

In the qualitative assessment, which surveyed domestic experts, NICE Investors Service scored 3.89 out of 5, higher than Korea Ratings·KR (3.80) and Korea Investors Service (3.76).

For the stability of credit ratings and the usefulness of forecast indicators—including rating stability, downward LRC ratio, and rating reversal ratio—NICE Investors Service was again found to be the most outstanding overall. However, in the quantitative assessment for this category, Korea Investors Service was rated the best.

The overall credibility of these credit rating agencies' capabilities among market participants—including credit analysts and credit bond managers—stood at 3.82 points, the same as last year. The association noted, "Due to increased volatility in the agencies’ rating evaluations, satisfaction with stability (3.78 points) declined slightly compared to the previous year (3.83 points), while the market participants continued to highly value the usefulness of forecast indicators."

The assessment committee members evaluated that this year’s qualitative results for NICE Investors Service reflected proactive risk diagnosis and diversified communication methods. They cited the agency’s timely rating adjustments for key sectors such as petrochemicals and NPLs, in-depth analysis of market interests such as private credit risk, and the establishment of an Industry Outlook Index system for major industry analysis as key factors meeting market demand.

Chairman Kang Kyunghoon stated, "Last year, the capital market was marked by a mix of expectations for interest rate cuts, real estate PF restructuring, and concerns over global tariffs. In this environment, proactive credit rating adjustments by agencies played a crucial role as an early warning signal for the market."

He added, "Given the heightened external uncertainties, such as global interest rate volatility and Middle East conflicts, it is ever more important for credit rating agencies to provide accurate and timely information to protect investors. I urge the agencies to contribute to the stability of the capital market through transparent and timely assessments."

This content was produced with the assistance of AI translation services.