Credit ratings are best thought of as a measure of risk: if I lend money to, or invest money in, this person, or this corporation, or this security, how likely am I to get my money back? This is essentially the same as the trivial assessments we make every day: the staid, millennium-old commercial bank in the center of town inspires no concerns in anyone, whereas the scruffy floater hanging out in startown might as well be a walking junk bond. Credit ratings merely formalize this.

Most relevant to Imperial investors, credit ratings are assigned to any entity of market relevance and any security listed on an Imperial exchange by one of a number of market rating agencies, such as Cheraelar & Orthodox (a joint venture between Gilea & Company and the Calmiríë Securities Exchange), Adichi Reliability, or Rational Risk Ratings. Such ratings are typically published covering short-term (12 year), medium-term (144 year) and long-term (576 year) periods.

The basic categories used for these ratings were set by Cheraelar & Orthodox, as one of the earliest rating agencies, and others have stuck to their format, although providing their own detailed write-ups and occasionally extending the format into other areas.

Super-Prime (AAA)

The six grades of super-prime are assigned to those entities or securities in which the ratings agency has confidence that there is no probability of obligor default whatsoever. Such a rating is extremely rare, requiring starcorporate status and/or a personal guarantee1 from Gilea & Company or another bank of equivalent stature2, along with domicile in a legal regime which permits appropriate guarantees to be made.

In the corporate realm, the Big 26 and five other Imperial corporations hold a AAA rating, along with fourteen foreign-domiciled corporations. Imperial gilts are the only sovereign security to be thus rated.

Prime (AA)

The twelve grades of prime are assigned to those entities or securities in which the ratings agency estimates the probability of obligor default as less than 0.083% during the rating period at the high end, and 0.166% at the low end. These are considered high-grade investments, suitable for long-term holds.

Sub-Prime / Sovereign-Impaired (A)

The twelve grades of sub-prime are assigned to those entities or securities in which the ratings agency estimates the probability of obligor default as greater than the 0.166% required to qualify as prime, but less than the 1% which would relegate them to the speculative class.

So-called “sovereign-impaired” entities or securities are those whose governing legal regime does not meet Alpha Concord Free Economic Zone Standard 23.1 where foreclosure is concerned, impairing legal recovery in the event of default. Such entities or securities cannot be classified higher than sub-prime, even if in other ways they would meet the standards for prime or even super-prime rating; naturally, the majority of sovereign debt and other sovereign-issued securities are considered sovereign-impaired.

Speculative (S)

The twelve grades of speculative are assigned to those entities or securities in which the ratings agency estimates the probability of obligor default as no more than 1% during the rating period at the high end, and less than 12% at the low end. While not a high rating in terms of risk, the majority of entities or securities rated S are new business startups, engaged in inherently risky ventures, or simply lack the financial history upon which a more favorable rating could be based; as such, they also tend to offer substantially higher returns than less risky investments.

S-rated entities and securities offer a great many opportunities to the attentive investor who can safely bear the risk of such investments, and to whom they are typically directed.

Junk (no letter code)

The twelve grades of junk are assigned to those entities or securities to which the ratings agency estimates a probability of obligor default exceeding 12% during the rating period. While not in default, and potentially on the road to recovery, the risk is significant and only experienced investors should consider them. In the bottom half of the category, sometimes referred to as “sub-junk”, such entities or securities are considered in collapse, “on the road to default”, and are best left to the vultures.

Defaulter (D)

The rated entity or security is in default, and no longer eligible for exchange trading. At this level, acquiring such securities is only useful as a basis for legal foreclosure, as a basis for hostile foreclosure, or as toilet paper.

– excerpted from “So, You Have Lazy Money?”,
Auric Productions Press

1. And at this level, that means the Old Lady personally signed off on it.

2. There are no recognized banks of equivalent stature, but it could happen.

All Debts Must Be Paid

Baríël Andracanth-ith-Brianth to Ven Mak Lochh, greetings.

I checked into your son’s case, and I’ve got to tell you, it’s as I thought. There’s no “slavery” involved. He signed up to a debt indenture.

Which is to say, to cover the details so far as my inquisitive could root them out, he developed a taste for the high life, and blew through his traveling funds in a matter of weeks. Then he took out a line of credit, and went through most of that, then invested the rest in high-risk stocks, lost it, took out another to cover the fees and margin calls, went high-stakes gambling with the rest, and lost that, too. At which point Baranithil Mutual filed suit over nonrepayment of those credit lines.

He settled by offering them an indenture. I presume because he didn’t have the money, and didn’t think you’d send him the money; or maybe he thought that you could get him out of it. Anyway, I’ve seen the contract and the signing record, and it’s all perfectly legal.

He may not be enjoying his new career as a fungus-farm mucker-drone, but whatever he may tell you, it’s not like he’s being worked to death, or beaten, or some such. He’s just doing crappy sub-robot work because he’s frankly unqualified to do anything else. He’s not even being denied access to communications, as you know, and speaking of that, you should probably tell him to lay off the goldbricking and trying to run out, because if he keeps running up nonperformance and skip-trace fees at his current rate, he’s going to be stuck down there a lot longer than 126 months.

Or you could contact Baranithil Mutual and pay them the Es. 103,680 to buy out his contract. For myself, though, I suggest you leave the young idiot where he is. What sort of damn fool doesn’t know not to run up bad debts on Seranth?

– Baríël

Taking It With You

Accessing Your Funds

It is possible for you to access your funds directly on most of the core Associated Worlds, including all worlds of the Fringe, which are serviced by the Imperial Banking and Credit Network or one of its affiliate clearing networks.  Direct funds access is also possible on select other major worlds and colonies where First Commercial has branches, using our premium tangle clearing facility.

However, other worlds are affiliated with alternative clearing networks due to local regulatory or legal requirements, or remain unaffiliated. On these worlds, direct funds access is impossible, but First Commercial maintains correspondent relationships with local banks across the Worlds. If a correspondent bank exists on the world you intend to visit, we can provide you with a letter of credit which can be drawn upon there, or a bank draft with which to establish a local account.

If no correspondent bank exists, it may be possible for us to establish a chain of correspondent banks to put funds in place in advance of your visit, or to purchase locally acceptable negotiable instruments or cryp (where anonymous untraceable funds are permitted by local law) on your behalf which you can use to establish a local account.

Please note that specie, unprovenanced gemstones, and precious metals are not recommended for this purpose due to their low mass-value and volume-value.

Access Technologies

Where direct funds access is available through affiliate networks, a variety of different technologies may be required to access local financial networks rather than the Universal, including one-touch credit bars, cards encoded using magnetic stripes, holographic or other optical markings, or physical encoding, or even smart-paper or printed checks manually delivered to a central clearing house. First Commercial can provide you with any of these as required, appropriately encoded to draw upon your account.

You should be aware that while the Imperial Banking and Credit Network affiliate agreement requires adherence to its privacy, anti-fraud, minimum clearance time and fee structure constraints, many of these affiliate networks do not support advanced feature sets including smart contracts, metrics checks, immediate clearing, and referral of purchases to you or your muse for validation. As such, remote access to your funds via these networks requires disabling these security features on your First Commercial account, or setting up a separate foreign drawing account without these features.

For those unfamiliar with these technologies, a cautionary note: virtually all of these, unlike the Empire’s familiar Purchase Threshold ™ system, require that you present goods you wish to purchase to a cashier and perform the transaction explicitly. Do not simply leave with your selected goods; this will not cause them to be purchased.

Thank you for considering First Commercial’s foreign travel and retrocompatibility services.

– leaflet, First Commercial Bank of Seranth