S&P Global Ratings Gives Compound Prime Junk Credit Rating

Read Time:1 Minute

-The first institutional DeFi company rated by S&P Global received a B-, or junk, grade.
-S&P Global Ratings has assigned Compound Prime a B- long-term credit rating.
-Compound Prime, a Compound Labs subsidiary, has a stable outlook, but ratings issuers cited uncertain regulatory conditions around stablecoins and Compound Treasurys currently very low capital base as well as its 4% return obligation as concerns.
-A B- rating, a junk rating six levels below investment grade, means the business is more vulnerable to adverse financial conditions, although it currently has capacity to meet financial obligations, S&P Global Ratings said in its explanation.
-As part of ongoing discussions with S&P, Compound Treasurys ratings could be upgraded in upside scenarios such as greater regulatory clarity for the digital asset industry, or a longer track record of stable performance, Cuming said in a statement.
-S&P choosing to assign a DeFi protocol a rating, which Compound said is a first, shows that greater adoption is coming, Cuming said.
-Over time, traditional financial markets and DeFi will converge, Robert Leshner, Compounds founder, tweeted. Compound Treasury is one of the products accelerating this transition, by offering institutions a cash-management product powered by the Compound protocol.
-Ratings will become more common, Lesher added, which will help to foster institutional demand.

SP Global Ratings S&P Global Ratings Gives Compound Prime Junk Credit Rating
S&P Global Ratings Gives Compound Prime Junk Credit Rating 2

Leave a Reply