1.1 Ratings Request
Brickwork undertakes rating assignment based on the request from the issuer directly. Before Brickwork analysts start the assignment, a rating mandate is generally received from the issuer. This signifies that the issuer accepts to the terms and conditions laid down by Brickwork in terms of co-operating with the analysts for providing the necessary information for carrying out the assignment. The mandate letter will also contain information regarding fees, the nature of information required from the issuer, terms related to appeal, withdrawal, suspension, etc...
1.2 Ratings Appeal
Once Brickwork Rating Committee approval is received, the issuer is generally provided with a copy of the draft rating rationale, if prepared, to review to ensure that the factual information is correct and that these materials do not contain any confidential information. In the event that an issuer disagrees with the rating and requests Brickwork to reconsider, any re-evaluation of a rating would occur in accordance with the Brickwork policy "Rating Appeal". The Rating Committee reserves the right to reconsider the request only when it considers necessary and may revise the rating. On the contrary, if the grounds are not sufficient, Brickwork may go ahead and retain the rating on the original basis.
1.3 Ratings Surveillance
Brickwork maintains ongoing surveillance of all its ratings. Generally a rating is fully reviewed and a meeting conducted with senior management of the issuer on an annual basis. Unless the rating is based on public information, Brickwork expects the co-operation of the issuer in keeping BRICKWORK informed of any significant developments, providing Brickwork with continuing financial information as released, and responding to questions that arise.
1.4 Ratings withdrawal & Suspension
The decision of whether to maintain surveillance of an issuer following a general default is made at Brickwork discretion. As with all ratings, surveillance is maintained only if the available information is considered adequate by Brickwork. If the decision is made to discontinue surveillance, the ratings are generally changed to 'Suspension’ soon after the default has occurred.
Brickwork may change a rating prior to withdrawal, if it views the public rating as misleading based on current information. The changed rating would be publicly released and then the changed rating would be withdrawn.
Whenever an issuer enters bankruptcy proceedings in BIFR, DRT or SARFESI process, Brickwork assigns rating of Not Appropriate for the issuer. In case of a need for Brickwork to maintain surveillance due to issuer emerges from default through a process of reorganisation, then the issuer will be reassessed / assessed before assigning a fresh rating.
1.5 Ratings Release
Brickwork strives to issue all press releases in a timely manner, placing a high priority on informing the public of its rating opinions in respect of the public ratings maintained by Brickwork, as soon as possible, following the rendering of the decision by the Rating Committee.
1.6 Confidentiality of Issuer information
Brickwork maintains in confidence all non-public information communicated to them by any issuer, or its agents, under the terms of a confidentiality agreement or otherwise under a mutual understanding that the information is shared confidentially. Brickwork has adopted procedures and mechanisms to protect the non-public nature of information shared with them by issuers under the terms of a confidentiality agreement or otherwise under a mutual understanding that the information is shared confidentially. Brickwork use non-public information only for purposes related to their rating activities or otherwise in accordance with their confidentiality agreements with the issuer.
1.7 Recognition of Default
Brickwork’s Policy for Default Recognition?
Brickwork Ratings considers non-payment of financial obligations on the due-date as default and accordingly downgrades the rating assigned to the instrument/issuer to “BWR D”. Financial obligations refer to both principal and interest payments due and non-payment refers to non-payment of even one rupee of financial obligations that have fallen due on the due date. No exceptions are made in default recognition and the treatment provided is uniform across all issuer segments.
In cases where the issuer has filed for bankruptcy under BIFR, DRT or SARFESI Act, the rating is withdrawn and marked “Not Significant”.
Will post default recovery have any impact on the default recognition?
Brickwork’s rating follows the probability of default while assigning ratings
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