Explain the following: Credit rating is useful to both investors and issuers.

Credit rating is useful both to investors and issuers. The main purpose of credit rating is to communicate to the investors the relative ranking of the default loss probability for a given fixed income investment, in comparison with other rated instruments. Investors also use the industry reports, corporate reports, seminars and open access provided by the credit rating agencies. The market places immense faith in opinion of credit rating agencies, hence the issuers also depend on their critical analysis. This enables the issuers of highly rated instruments to access the market even during adverse market conditions.