Analyzing a company in their specific organizational functions is most important, because no company operates in a vacuum. No matter how solid the management and balance sheet of a company are, its profitability will be affected by the strength of their rivals. So the company should examine the companies and determine what kind of threat the possess. Companies should also pay attention to the changes that occur in each particular industry. For example, the innovations in technology. Because when making long term investments, the company should make sure that they can financially adapt to the changing situations. Relative ValueThe last step that should be followed is determining the relative value of the bond, in contrast to the agency determined rating. Comparing the credit statistics of the company to those of the industry peers, will result in a true sense of the ratings. Analyze on the indenture (terms and conditions) of the bond: its covenants, corporate structure, security and redemption features. Finally, the company should examine the pricing of the bond in relation to alternatives in the same industry, and to bonds in other industries with comparable ratings and credit statistics. ...
