Brickwork Ratings Policy
- 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.
- 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.
- 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.
- 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.
- 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.
- 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
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
- 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.
- 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
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
Annexure III Guidelines on what constitutes
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
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
(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.