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Brickwork Ratings Policy

  1. Ratings Mandate

    Brickwork Ratings (BWR) undertakes a rating assignment on receipt of a mandate from the client. This signifies that the client has accepted the terms/conditions stipulated by BWR in terms of fully co-operating with BWR for completing the assignment, and where necessary maintain surveillance and complete periodical review.

  2. Assignment of Rating and publishing

    Once Brickwork Rating Committee approval is received, the client is issued a Rating letter and provided with a copy of the draft rating rationale, to ensure that the factual information is correctly incorporated. All Initial Ratings issued by BWR and the Rating rationale need acceptance of the issuer within seven days of issue. On receipt of the client’s acceptance of Rating, the rating rationale is published and also placed on BWR’s website. Unaccepted Ratings shall also be published on the BWR website.

  3. Provisional Rating

    A provisional rating may be assigned when there is a need for completion of certain formalities and/or submission of final documents / proof of executed documents etc. Generally, a provisional rating would be assigned the final rating within a period of 6 months. For policy refer Annexure I.

  4. Rating Appeal

    In the event that a client disagrees with the rating and requests Brickwork to reconsider, any re-evaluation of the rating would be based on any new information provided by the issuer. The Rating Committee considers all the new information and if necessary, may revise the rating. For policy refer Annexure II.

  5. Ratings Surveillance/Review

    BWR maintains ongoing surveillance of all its ratings for the life of the rated issue/facility and conducts a Rating review on an annual basis for NCD/bonds and once in fifteen months for Bank Loan Ratings. BWR requires the co-operation of the client for periodically providing all information, financial statements, advising any significant developments, management changes etc. On receipt of required information and fee from the client, bankers. Trustees etc. as the case may be, a rating review will be carried out and rating will be advised to the client and also published. A rating review can be conducted at a shorter interval also depending on each case. While client acceptance of the rating is required for initial rating, acceptance is not required for a rating arising out of a review.

  6. Rating overdue for review and Issuer Non-cooperation

    Where Annual Review of the Ratings Assigned to Bond Issue/NCD Issue/Bank Loans cannot be undertaken in time for any reasons, an advisory Rating Not Reviewed would be published on the BWR website.  Action for issuing the advisory would be initiated in a) Bond/NCD rating cases where the annual rating review has become overdue for one month or more from the date of publishing the relevant Rating Rationale and (b) Bank loan Rating cases where annual review is overdue for three months or more from the date of publishing the relevant Rating Rationale.

    For non-cooperation cases, a review will be undertaken based on available information and such ratings will appear with a suffix along with Rating Symbol as “Issuer did not cooperate; Based on best available information”. If the issuer reverts with appropriate information and payment of fee, BWR will undertake a fresh review of the rating after following due rating process and take an appropriate rating action and comply with other procedural requirements of issuing a rating letter and publication of the Ratings. For policy refer Annexure III.

  7. Credit Watch

    Placing a rating on credit watch may be necessary under certain circumstances where it would be very difficult to make any reasonable assessment on the issuing Company’s performance in the near term. It shall be the endeavor to take out a Rating out of Credit Watch within a time frame of 6 months. For policy refer Annexure IV.

  8. Rating Withdrawal
    Ratings issued by Brickwork Ratings will be under surveillance for the life of the rated instruments/credit facilities and till final redemption. A rating may be withdrawn under the following conditions:

    The issue/credit facility has been completely redeemed by the client on the due date or prior to the redemption date.

    In cases where the client has merged into another entity, the rating is withdrawn and a new rating may be issued based on any rating request by the new entity.

Annexure I Policy on Provisional Ratings

A provisional rating may be assigned when there is a need for completion of certain formalities and/or submission of final documents/proof of executed documents, in respect of crucial instruments such as, agreements, contracts, confirmations, guarantees, trust deed, details of structured payment mechanism, etc.

Post assigning a provisional rating, the analyst shall closely follow up with the issuer/client for submitting appropriate proof for completing the required documentation. On receipt of proof of completion of required documentation, the case shall be put up with suitable recommendation to the Rating Committee for approving/affirming the final rating. Generally, a provisional rating would be assigned the final rating within a period of 6 months.

Annexure II Policy for Appeal on the assigned Rating

If an issuer does not agree with the assigned rating, he can have recourse to an appeal process. The issuer shall take up in writing seeking a revision in the rating and should provide justification for his appeal. A decision to accept or reject an appeal is entirely at the discretion of BWR.

Upon receiving the appeal, the analyst shall put up the appeal to the concerned Coordinating Chairperson (CCP) with his recommendations who will take a decision on whether the appeal merits any consideration if the initial rating had been approved by his committee. If the CCP is of the opinion that the appeal does not merit reconsideration of the matter, he will place the matter to the Rating Committee along with his recommendations. The Committee shall consider the matter and decide the issue on merits. If the Committee decides that the appeal does not merit reconsideration of the rating, the issuer will be informed accordingly. If it is felt by the CCP that the appeal merits consideration, the matter shall be placed to the committee by him with necessary recommendations. If the Committee decides in favour of the appeal and approves a revised rating, the issuer shall be issued an appropriate rating letter along with rating rationale. Upon the acceptance of Rating and the rationale by the issuer, the usual procedure of publication of the rationale shall be followed. If rating is not accepted, the rating will however be disclosed on BWR website as per SEBI circular dated 1 Nov 2016.

Annexure III Guidelines on what constitutes Client Non-Cooperation

The following shall be considered as Non-cooperation by an issuer/a client

i) The issuer/client’s failure to provide timely and required information for rating surveillance and for periodical review of the assigned rating or to provide necessary clarification to complete the rating review.

ii) In terms of the Rating contract, the issuer/client is suo moto required to keep BWR immediately informed of any information/development which impacts the status/financial performance/financial strength of the issuer/client which will have a bearing on the assigned Rating. Issuer/client’s failure to act in such a manner would be considered as an act of Non-cooperation.

iii) An issuer/client is required to pay fee agreed for providing specified rating services. Failure to pay such fee would be considered as an act of Non- cooperation.

iv) Any other act of omission or commission which BWR may consider as an act of non-cooperation.

BWR may take a Rating action as deemed necessary by it, in case of non-cooperation by the issuer/client.

Annexure IV Policy for placing Ratings on Credit Watch

During the surveillance period of the assigned rating of any entity, there may be sudden events or developments involving changes in business, management, industry or financial profile of the entity. The impact of such developments for the entity’s rating may be difficult to assess immediately and hence the rating requires to be put under ‘Credit Watch’.

(i) Such circumstances (illustrations only) could be (a) Change in Shareholding pattern of the issuing Company which can have an effect on the overall control of the Company, its Management and the way it operates (b) Demerger or Division Spinoff/Buyouts and Takeovers could impact the operations of the Company, its profitability, market share etc. (c) Change in Business Strategy of the issuing Company impacts its profitability and performance.

(ii) The analyst concerned shall put up to the rating committee with the recommendation that the said entity may be placed under “Credit Watch” with positive/negative or developing implications. Intimation of placing the rating on credit watch shall be given to the issuer/concerned client and such information shall also be published in the public domain .

(iii) The ratings placed on “Credit Watch” shall be monitored for further confirmation of the effect of these developments from the client. Once a reasonable assessment is possible, the matter may be placed before rating committee (within a reasonable period of 6 months) for removing the ratings from “Credit Watch” for appropriate the rating action.