As a multinational company, you face the scrutiny of tax authorities around the world.
Standard & Poor’s Risk Solutions can provide your company and your tax consultants with tools for efficient and effective tax planning and compliance.
We provide you with analytic services that assist organizations with arm's length pricing on your inter-company loans and guarantees—all based on sound fundamental credit and economic principles. These services include establishing stand-alone credit scores or credit rating estimates for subsidiaries and estimating an appropriate interest rate for inter-company financing. Our services include provision of detailed documentation supporting the methodology used and conclusions drawn.
The benefits to your organization:
Estimate the stand-alone Standard & Poor's credit rating on subsidiaries or affiliates for purposes of pricing inter-company loans and guarantees;
Access extensive global, regional, and local market research, and modeling;
-Document methodologies;
-Establish consistent methodologies.
Components
Independent Credit Assessment
As a multinational company, you may often extend loans or guarantees to related companies that do not have an independent assessment of creditworthiness acceptable to government tax authorities globally. Standard & Poor’s offers you a variety of credit assessment choices depending upon the situation. These choices vary from establishing an interactive Standard & Poor’s rating using Standard & Poor’s Credit Estimates, to the use of quantitative and credit scoring models that estimate a Standard & Poor’s rating. In all cases, well-established and widely used Standard & Poor’s rating methodologies drive our rating estimates and underpin their credibility. Solutions are tailored to meet a company’s specific needs.
Debt Market Analysis/Credible and Transparent Pricing
Standard & Poor’s provides developed and documented methodologies for estimating interest charges or guarantee fees for subsidiaries or affiliates of varying credit quality, and for various types of facilities. When market data are limited or unavailable, you can use our pricing models to estimate comparable interest-rate spreads. Our approach is a proven, defensible methodology for determining arm’s-length interest charges or guarantee fees.
Documentation
Standard & Poor’s provides you with documentation to respond to the requirements of global tax authorities. Our supporting documentation empowers you with an analysis and a detailed explanation of the methodologies employed. The documents for each transaction include:
Report supporting the Standard & Poor’s credit assessment results.
Estimated interest rate spreads; and
Explanation of the pricing methodology employed.
Related Solutions
Quantitative Credit Models
Commercially available quantitative models for estimating ratings, probability of default, and loss given default.
Credit Assessment Templates
Provides credit assessment templates that include quantitative and qualitative risk factors, low-default sectors, or specialized asset classes.
Credit Estimates
Provides a confidential rating estimate of an unrated company or subsidiary/affiliate based on abbreviated methodology.
