Counterparty and credit risk assessment

Below we have outlined a Counterparty And Credit Risk Assessment case study that illustrates the kind of challenges we help our clients to tackle and the advantages we can deliver. This is just a small selection of our experience & if you would like to discuss a specific intelligence requirement, please contact a member of our team.

Introduction to service area:

Commodity and freight typically require the coordination of several parties in order to operate successfully. When established means of security are not available or desired, these transactions often involve a significant level of trust, and often open credit terms. As such, the management of counterparty and credit risk is crucial to protect the parties to the transaction, and reduce transactional, counterparty and reputational risk. Infospectrum addresses these challenges by providing expert analysis and business intelligence through our counterparty and credit risk assessment reports, which provide the comprehensive, up-to-date information that companies need to properly assess potential partners.

Case background

Our client was approached by its trader to onboard a potential counterparty and allocate a credit line. This kind of onboarding can be high risk, and should be subject to extensive assessment. The trader had provided background details and other evidence, but our client wished to support this with information from a trusted intermediary, without undermining the relationship.

How did InfoSpectrum proceed?

The client asked us to provide a report within 48 hours, making the process highly time sensitive. Having covered the subject for over 10 years, and based on a strong relationship with the counterparty’s management team, our analysts were able to access information not in the public domain, and combine this with documentary evidence and feedback from well-placed market sources to provide an assessment and rating. As a third-party, our assessment proved invaluable, providing the client with genuine, unbiased information concerning background and performance levels.

What were the impacts?

Our historical data showed that the subject had performed over multiple industry cycles, and we were able to rapidly secure up-to-the-minute performance data from our global sources. When combined with our rating, our insight gave the client the confidence to move ahead rapidly, gaining a useful client without harming the relationship at an early stage.