Getting to grips with credit ratings is one of the key issues that a chief financial officer - particularly a listed company CFO - needs to tackle. That is the assessment of David Craig, outgoing Commonwealth Bank CFO and president of the FEI.
Speaking at an FEI breakfast meeting in Sydney recently Craig acknowledged that during periods of stability, ratings could for some organisations be a "set and forget issue", but warned that if there was any sense that a national downgrade was in the wings CFOs needed to prepare for the cost of funding to rise and its availability to fall.
Rating agencies issue what amount to report cards on the credit worthiness of companies and national economies. The better the rating, the more likely investors or lenders are to get their money back. For listed corporations the good opinion of a rating agency is a valuable commodity.