Heuristic SME rating model. Builds a Q-Lana grade from five weighted factors, applies adjustments, and derives multi-year PD.
1. Factor Weights
Distribute 100% Across the Five Factors
%
%
%
%
%
Total
100%
Adjust only after policy decision, otherwise keep constant.
2. Risk Factor Inputs
General Terms
Country of Operation
Sector and Business (sample selection of criteria)
Management
Financials
3. Adjustments
Performance Adjustments
4. Rating & PD
Rating before Adjustments
Q-A-Upper medium grade
Rating after Adjustments
Q-A-Upper medium grade
Probability of Default (after adjustments)
1 yr
1.25%
2 yrs
1.67%
3 yrs
2.08%
4 yrs
2.50%
NOTE
Heuristic SME rating model. The five factor weights must sum to 100%. The numerical result before adjustments is intentionally hidden - only rating letters and PD percentages are shown. Adjustments apply notches downward (and capping rules) to the rating before the PD lookup. Use this model for training purposes only.
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