General corporate — otherGeneral corporate — other

General corporate – other

1. For all other unrated general corporate exposures that are not treated as SME, an ADI must either:
   1. assign a 100 per cent risk-weight to all exposures; or
   2. assign an 85 per cent risk-weight to exposures to ‘investment grade’ corporates and a 110 per cent risk weight to exposures to ‘non-investment grade’ corporates where the ADI has in place an APRA approved methodology that differentiates between ‘investment grade’ and ‘non-investment grade’ corporates.

An investment grade general corporate refers to a general corporate entity that has adequate capacity to meet its financial commitments in a timely manner and its ability to do so is assessed to be robust against adverse changes in the economic cycle and business conditions. When assessing whether a general corporate exposure is investment grade or non-investment grade, an ADI must assess the general corporate entity against the investment grade definition taking into account the complexity of its business model, performance against industry and peers, and risks posed by the entity’s operating environment. An ADI must have sufficient information to conduct adequate due diligence for the assessment of whether the corporate entity is investment grade.