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What credit rating means? Rating reflects the borrowers accountability, expected capability and inclination to pay interest and principal in a timely matter. Rating is an isolated function of a credit risk evaluation Rating is useful in differentiating credit quality Rating will involve issue specific evaluation
CRISIL
Objectives of CRISIL To assist both individual and institutional investors in making investment decisions in fixed income securities. To enable corporate to raise funds in large amounts and at a fair cost from investors. To enable intermediaries in placing their debt instruments with investors by providing them with an effective marketing tool To provide regulators with market driven system for bringing about discipline and healthy growth of capital markets.
Borrower/Corporate
Request For Rating Document Preparation
CRISIL
Analytical team conducts research Collection of information
Rating Committee Communication of Rating to issuer Dissemination of rating Surveillance and annual review
Capacity of Debantures Fixed timely /Bonds Deposits payment of interest and principal
Highest Safety High Safety Adequate Safety AAA AA A FAAA FAA FA
Short-term Instrument
Developer Project
AAA AA A
AAAf AAf Af
Moderate Safety
Inadequate Safety High Risk Substantial Risk Vulnerable to default
BBB
BB B C FB FC
P-4
PA4 -
BBB
BB
BBBf
BBf Cf
B C
Rating Criteria
Likelihood of default Nature and provisions of the obligations Protection afforded to, and relative position of, the obligation in the event of bankruptcy or reorganization