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For Immediate Release
[Click Here for Italian Translation]
ISMEA and Moody's KMV Announce First Risk Assessment Models for Italian Agricultural Companies
The new tool to assist participants in the agricultural sector will be presented in Rome on February 1
The President and the General Director of ISMEA - Arturo Semerari and Ezio Castiglione - and the President of Moody's KMV - Andrew Huddart - will take part in the meeting
ROME - January 31, 2006 - The partnership between ISMEA (Istituto di Servizi per il Mercato Agricolo e Alimentare) and Moody's KMV, today announced the first credit risk rating system for Italian agricultural companies.
The new rating system will be presented in Rome on Wednesday, February 1st at 10:00 a.m. at the Palazzo Taverna (Via Monte Giordano, 36), with the participation of ISMEA's President Arturo Semerari, General Director Ezio Castiglione, and the Head of the Markets and Risk Management Department Raffaele Borriello. Presenting on behalf of Moody's KMV are President Andrew Huddart and Director for Italy Giovanni Butera.
This unique rating system was developed to include the evaluation of specific characteristics of agricultural companies by using ISMEA's large quantity of agricultural sector information together with the advanced Moody's KMV analysis and default prediction technology of Moody's KMV RiskCalc® 3.1 Italy and RiskAnalyst™ 3.0. The two partners have developed three rating models for assessing the credit risk for the following types of private companies:
- Companies with publicly available financial reports;
- Small and medium-sized firms that are not required to provide financial statements;
- Agricultural Cooperatives.
These Models will be used by the Italian government to monitor the credit worthiness or default risk of companies within the Italian agricultural industry, and will serve as an objective guide for granting public funding in the form of loans and other financial aid. The ISMEA ratings will also compliment the internal evaluation process of financial institutions, supporting Basel II compliance.
Each agricultural company is assessed according to statistical models that consider quantitative and qualitative factors. Publicly available financial information is taken into consideration for the analysis of quantitative factors. ISMEA and Moody's KMV analyze the ISMEA databanks to identify the qualitative variables that reflect the risk of a firm. This rating system considers qualitative factors such as the competitive, structural and management variables of a firm's success, which are not always given due consideration in normal, pre-loan investigations.
The rating models include sector and counterparty information, and allow for a common language of risk measures, enhancing transparency of fund management and allocation.
ISMEA - Istituto di servizi per il mercato agricolo-alimentare [Institute for services for the agricultural-food market] - is a public economic body founded in 1987 that supplies services to companies in the agricultural-food sector: financial, insurance, informative, land re-allocation and market services. In the insurance field, the Institute offers services that include management of the reinsurance fund for agricultural risks and market unit price surveys to establish insurable production values with subsidized policies, as well as the study and experimentation of new insurance formulas to propose to the insurance and the agricultural-food markets. For further information, visit the website www.ismea.it.
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