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We know our originators

The icrowd Ratinghouse It is not a measure of the quality or suitability of the originator - and should not serve as a replacement for individual due diligence.

Qualifying originators

icrowdhouse has implemented a system of risk ratings, which apply to originators on the platform. These have a scale ranging from "A +" to "D", which represents the lowest and highest level of risk respectively. Next, we tell you in detail how they work.

What do we measure?

The ratings are an indicator of the operational and financial stability of the originator of the project. When evaluating them, we give priority to their ability to capture and develop opportunities. In addition, the originator's financial situation is an important material factor.

What data is used?

The ratings are based on information obtained during the initial phase of the due diligence procedure and on data obtained during the continuous monitoring process. This includes the main data of the originators, such as interviews with the managers, face-to-face visits, internal and audited financial statements, corporate presentations, credit policies and risk control documents.

The process they perform is also evaluated to validate the viability of a project.

Likewise, a study of publicly available resources is carried out (for example, web searches, press releases, industry reports, commercial databases, etc.). In those cases where it corresponds and when available, references are requested. The CVs and references of the members of the management team are also collected.

When are grades updated?

icrowdhouse constantly monitors each originator, carrying out an analysis of the financial data and the quality of their projects. Investor valuations are also integrated into the process. If there is an improvement or worsening of the essential factors, this can result in an immediate increase or reduction in the rating.

In addition to the adjustments made immediately, the ratings are adjusted annually and include a complete reassessment process of all the factors mentioned above.

Rating system

A+ Low risk
A financially sound company, which has a leading and stable market position
A
A-
B+ Moderate risk
A stable company, but with a weaker financial statement and a medium market position. It has a shorter project history.
B
B-
C+ High risk
A company with financial performance and a position with considerable weaknesses. Its competitive position is limited or the quality of its assets is below average. Your project history is limited.
C
C-
D Discontinued
A company with financial difficulties or no project history.

Evaluation Methodology

The methodology of the qualifications of the originators has been developed internally. The evaluation of each originator is carried out by our risk team. ? The rating is based on five key factors that characterize each originator: operating environment (1 point), company profile (1,5 points), management and strategy (2 points), risk trend (1,5 points) and financial profile ( 3 points). In addition, an additional factor is added to the originators according to the percentage of capital with which they usually participate in their projects (1 point).

Operating environmentPoints
The operating environment at local and general level is evaluated in order to analyze whether it allows the effective functioning of the sector. It is taken into account and possible future impacts are applied. If there is any evidence that changes in the environment are occurring, a higher risk rate is assigned. The existence of regulatory institutions is weighted positively.1
Company ProfilePoints
The market position of the company, the type of projects carried out and the organizational characteristics are taken into account.
A better positioning in the market allows to obtain a higher score. A greater number of project typologies is associated with better diversification and lower risk.
A clear organizational structure allows to obtain a higher score.
1,5
Operation, strategy and historyPoints
It includes the evaluation of the operation of the company, the strategy, credibility and its history.
The performance evaluation is carried out in terms of effectiveness and business perspective. The quality of the budgets and the reasonableness of the assumptions made are factors that are taken into account and that affect the ratings. Credibility is assessed in terms of relevance and years in the sector. The history and ability to execute previous projects in term and budget are factors that add to this evaluation.
2
Risk tenurePoints
Risk exposure and corresponding risk management practices (mitigating) are assessed.
The assessment takes into account exposure to market risk, credit risk, liquidity risk and operational risk. Depending on the exposure to them and the mechanisms established for their prevention, control, attenuation, a positive or negative rating adjustment will be applied.
1,5
Financial profilePoints
This factor focuses on the quality of the projects, the financial situation of the company and its performance.
We take into account the quality of the company's assets, analyze the operating account and its stability over time. Likewise, indicators are used to measure solvency and operational efficiency.
Capitalization and leverage - the relationship between capital and debt is an essential measurement element. Financing, liquidity and existence of alternatives in case of contingency.
3
Additional factorPoints
This factor takes into account the legal entities with which the originator undertakes the projects and the percentage of capital, with which on a recurring basis, participates in its projects.1
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