Over the course of my internship I've had the opportunity to interface with folks from our credit risk group and chatted with them about how we determine the creditworthiness of our counterparties - and unsurprisingly a lot of it revolves around analyzing their publicly available financial statements and modeling out a suitable rating metric.
However, I was wondering - how does one go about analyzing the creditworthiness of a private counterparty given the obvious fact that their financials aren't publicly disclosed?
bump
They're the same metrics for private issuers as for public businesses, i.e. debt-to-equities ratio according to the industries, and within companies with comparable size.
You request financials and credit information. It is in the counterparties interest to have Open Account with you and if they request it, they will send the appropriate financials to determine how large of a line you can extend them. This is from a commodities perspective.
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