Operational Capability Assessments

Australia Ratings assesses an operating party’s capacity in effectively managing the operational risks associated with a pool of financial assets.

An Operational Capability Assessment (OCA) is Australia Ratings’ opinion and focuses on the operating party’s (an operating entity, special-purpose vehicle, or asset) ability to perform its role adequately and limit exposure to loss arising from operational risk.

Operational Capability Assessments can be conducted on:
  • Pools of assets retained by an owner, 
  • Pools of financial assets that secure a bank or capital market financing or investment via a managed fund. 

Pools of assets can include mortgages, trade receivables or loans.

Conducting an OCA is a 3 step process involving:

  • a review of the organisation’s underwriting servicing, operational and compliance policies and procedures;
  • a review of asset files and an analysis of the historical performance of the asset pool; and
  • an onsite meeting with key personnel.

An OCA ranking reflects and comments on the organisation's:

  • ownership structure and historical performance:
  • operational capabilities;
  • experience and skill of management and staff;
  • systems and technology;
  • risk management;
  • financial adequacy and stability.

Australia Ratings uses the following scale to rank its Operational Capability Assessments:

Assessment  Definition


This assessment reflects the highest capacity to perform, supported by many superior operational abilities.  This assessment represents the highest capacity to assist the issuer or fund to meet financial obligations in a timely manner.

Very Strong

An assessment of ‘Very Strong’ indicates a very strong capacity to perform, supported by superior operational abilities.


An assessment of ‘Strong’ indicates a strong capacity to perform, supported by a few superior operational abilities.


An assessment of ‘Capable’ indicates a capacity to perform, supported by adequate operational abilities.


An assessment of ‘Weak’ indicates a poor capacity to perform, inhibited by some operational or risk management deficiencies.

Failure to Perform

Assigned when a party or system contracted or licenced has failed to meet the required standards of the contract.

Contact us for more information about our operational capability assessment services.


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