Credit Risk Assessment for Energy Service Firm

This document is a case study detailing the credit risk assessment provided by Moody's for a U.S. Energy Service Firm. The firm, which specializes in offering solar panel systems and community solar subscriptions, faced challenges in assessing the creditworthiness of its dealers and builders due to the capital-intensive nature of solar panel installations. The assessment was necessary to determine clients' credit quality and reliability of cash flows, particularly since many clients are private middle-market companies lacking formal credit ratings. Moody's offered an innovative credit risk solution that includes various metrics such as Probability of Default (PD) levels and peer analysis, which assists the client in monitoring credit risk effectively. The document outlines the features of Moody's PD models, which provide forward-looking probabilities of default for over 580 million firms globally. Additionally, it describes the implementation of customized alerts for tracking changes in credit risk, ultimately leading to improved efficiency and risk management for the client.