Before weight can be given to an independent credit rating in a thin capitalisation case, there are a number of factors that should be considered:

The entities being rated

When the rating was carried out

The influence of an overseas parent

Problems that have occurred with independent credit ratings

Banks' own assessments of credit risk

The ‘would’ test in the UK thin capitalisation legislation

The need for financial covenants to protect the tax position

The need for a prudent borrower to have a buffer against adversity

The importance of the investment grade/non-investment grade distinction

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