Report Glossary

Term	Definition
Credit Assessment	The analysis completed by the Credora Team, on the basis of documentation and real-time data provided by the borrower. The Credit Assessment is performed according to the relevant methodology.
Credit Score	A score out of 1000, granularly differentiating the creditworthiness of borrowers. Credit scores are outputs for specific methodologies.
Rating Agency Equivalent (RAE)	Rating Agency Equivalent produced as part of the Credit Assessment, and anchored to the big 3 US Credit Rating Agencies. RAEs provide a way to compare ratings from one agency to the ratings from another. This rating scale enables borrowers, lenders, and partners to easily compare the results of the Credit Assessment with other traditional debt issuances and credit instruments.
Implied PD	Implied probability of default for the borrower and over a specified tenor. This is derived using the RAE and corresponding historical default rates.
Additional Borrow Capacity	Output of a scenario analysis on the Credit Score, considering the impact of additional unsecured debt in the context of the strategy, current leverage, and historical leverage. Represents the additional amount of unsecured debt a borrower can take on before materially changing creditworthiness.
Total Borrow Capacity	The sum of Additional Borrow Capacity and the Borrower's latest reported debt (excluding trading margin).
Reported Value	A financial value direct from a Borrower's submitted Financial Statements.
Normalized Value	A reported value that has been normalized by Credora to ensure consistency & comparability across all Borrowers. Adjustments are made to standardize accounting practices.
Factor Input	A value used as an input in order to generate a Factor Score. A Factor Input, or Score Input, is assessed on a Scoring Curve in order to determine the Factor Score.
Scoring Curve	Scoring curves are set by the strategy of the Borrower and peer benchmarking data.
Score Output	The points awarded for a factor, category, or section.
Peer Group	A group of similar companies to which it is reasonable to compare a borrowers data. Peer group analysis enables lenders & partners to contextualize borrower metrics and scoring outputs.
Anchor PD	A PD which serves as the starting point for multiple methodologies. The Anchor PD may be derived from the underlying performance of a portfolio of loans, obtained through third party ratings agencies, or historical analysis of relevant comparables. From the Anchor PD a series of modifiers are applied until a Final PD is obtained.
Notch Adjustment	Modifiers are applied using notch adjustments, impacting the Anchor PD. A positive notch adjustment results in a lower probability of default, and a negative notch adjustment results in a higher probability of default.
Factor Contribution	The impact that each modifier has on the Anchor PD, in determining the Final PD.