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Brickwork Credit Rating Process

The Brickwork Credit Rating Process details the various steps and activities involved in assigning a credit rating, starting from the signing of the rating contact to the assignment of the rating and subsequent actions such as rating dissemination and surveillance.

Brickwork Ratings (BWR) has well-defined and updated criteria, which are publicly available. The rating committees have the sole authority to assign ratings. BWR shall disclose on its website details of all ratings assigned, irrespective of whether the rating is accepted by the issuer or not even in case of non-public issues in compliance with SEBI circular MIRSD4/CIR/P/2016/119 dated Nov.01, 2016. Every long term rating assigned is kept under surveillance, periodically reviewed and is withdrawn on repayment of its obligations.

The Business development group is responsible for obtaining mandates from prospective entities, and this group will handle all business communication and finalize the commercial terms of the rating assignment. The Ratings group handles all analytical responsibilities for a rating assignment and for assessing credit risk for the relevant entity. The Ratings group will be responsible for the rating process from receipt of mandate for a rating until the time the rating is made public. They are also responsible for surveillance and review of ratings.

BWR Credit Rating Process

Brickwork Ratings Process is broadly classified into: a) Pre-Rating b) Rating and c) Post-Rating processes .


  1. Brickwork Ratings (BWR) process begins with a credit rating request from the issuer or its representative.
  2. At Brickwork, we have adopted a practice to explain to the entity the scope and use of the ratings, as well as the broad assessment procedure followed. This part is normally carried out through presentations, brochures and other materials as disclosed in the website. BWR policies related to the use of ratings and possible circumstances for rating actions are also clearly communicated.
  3. The issuer signs the detailed rating contract/agreement and provides initial information as well as rating fees.


  1. Credit rating criteria enable analysts to analyze and interpret information appropriately. BWR refines criteria periodically when required, taking into account changes in the market environment. BWR has developed more than twenty five Rating Criteria for rating of products under various sectors, industries and services. BWR publishes such criteria on its website.
  2. Brickwork’s rating process ordinarily takes about 3 weeks. The rating mandate, structure of the instrument as well any information received is forwarded to the rating analyst who works under the guidance of an experienced Chairperson.
  3. Brickwork analysts study the general information on the economy as well as industry both from the international and domestic perspective. For instance the effect of global financial crisis, high fluctuations in foreign exchange, commodity markets etc. may be relevant for the Export Import companies.
  4. The team of analysts has discussions with the issuer’s Management. The team discusses the management views on their competitive strategy, marketing plans, financial projections, short term & long term outlook, corporate governance policy as well as hedging policies, etc. The analysts shall also seek requisite information from the issuer’s Banker, Debenture Trustee and if need be from the Statutory Auditor.
  5. The analyst presents the case to the Rating Committee, which typically comprise of persons with significant experience in banking/capital markets/risk management/ and public finance etc. Brickwork also has an External Rating Committee, majority of which are independent members. Independent would mean persons not having any pecuniary relationship with BWR or any of its employees.
  6. On obtaining approval of the Rating Committee, the rating to the issue/ credit facility is communicated to an issuer. The rating rationale cum press release (in line with SEBI guidelines) is also sent to the issuer. Brickwork analysts answer any queries the issuer may have regarding the rationale.
  7. If the issuer disagrees with the initial rating, and has additional information that it believes can make a material difference to its rating, the issuer has recourse to an appeal process. Upon receiving requisite information, the rating committee will look into the appeal and decide the issue on merits.


  1. Initial Rating issued by BWR and the Rating rationale need acceptance of the issuer within seven days of issue. Ratings which are accepted shall be published in the media as well as on BWR website. Unaccepted Ratings shall be published on the BWR website.
  2. Most issuer and long term issue ratings are typically valid for a year with certain exceptions like IPO grading, short term ratings, recovery ratings etc. Brickwork team monitors Companies as needed and does surveillance for the life of the instruments and carries out a review of the rating at fixed intervals- annually in case of NCD/Bonds; once in fifteen months in case of Bank credit facilities- or if need be, at shorter intervals. The issuer has obligations to timely pay surveillance fee, provide information sought by BWR and immediately inform Brickwork regarding any material information-positive or adverse event- which has the potential to affect the Issuer’s financial position, performance etc. The Rating arrived at after a review shall be advised to the issuer by a suitable letter and a rating rationale which will be followed by publication of the Rating. A Rating arising out of a review does not require Issuer’s acceptance irrespective of whether there is a change in the rating, change in the rating outlook or a change in the amount rated.
  3. If the issuer does not provide required information in time for a review of the rating, , on the due date of the review, the rating will be placed under Rating not Reviewed category and simultaneously a press release will be issued to that effect and also published on BWR website. BWR may also indicate Rating Not-Significant ‘NS’ when it is difficult to compute the probability of default of such instruments due to protection under State Regulations, courts or the bankruptcy laws.

    If the non-cooperation of the issuer continues, 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.

    An accepted rating shall be withdrawn on full redemption of the rated instrument/credit facility and on the issuer producing proof of redemption from the debenture Trustee in case of market related instruments or in case of bank credit facility, from the prescribed atuhority. On withdrawal of Rating consequent to repayment, suitable intimation will be sent to the issuer/Bank and a press release will be issued.