CRISIL RATING

CRISIL has adopted the conventional rating system prevailing in the advanced centuries. The main symbols used in credit rating of debt securities and their meanings are given below:

For preference shares, the letters “Pp” are prefixed to the debenture rating symbols. The fixed deposit rating symbols commence with “F” and the short term instruments use the letter “P” from the concept of ‘prime’.

Rating Symbols used for Debentures

AAA (Triple A) Highest Safety

Debentures rated ‘AAA’ are judged to offer highest safety of timely payment of interest and principal through the circumstance providing this degree of safety are likely to change, such changes can be envisaged are most unlikely to affect adversely the fundamentally strong position of such issues.

AA (Double A) High Safety:

Debenture rated ‘AA’ are judged to offer high safety of timely payment of interest and principal they differ in safety from ‘AAA’ issue only marginally.

A – Adequate Safety

Debentures rated A are judged to offer adequate safety of timely payment of interest and principal; however, change in circumstances can adversely affect such issues more than those in higher rated categories.

BBB (Triple B) – Moderate Safety

Debentures rated ‘BBB’ are judged to offer sufficient safety of timely payment of interest and principal for the present, however, changing circumstances are more likely to lead to a weaken capacity to pay interest and repay principal than for debentures in higher rated categories.

BB (Double B) – Inadequate Safety

Debentures rated ‘BB’ are judged to carry inadequate safety of timely payment of interest and principal. While they are less susceptible to default than other speculative grade debentures in the immediate future, the uncertainties that the issuer faces could lead to inadequate capacity to make timely interest and principal payments.

B – High Risk

Debentures rated ‘B’ are judged to have greater susceptibility to default; while currently interest and principal payment adverse business and economic conditions would lead to lack of ability or willingness to pay interest or principal.

C – Substantial Risk

Debentures rated ‘C’ are judged to have factors present that make them vulnerable to default. Timely payment of interest and principal is possible only if favourable circumstances continue.

D – In Default

Debentures rated ‘D’ are in default and in arrears of interest or payments or are expected to default on maturity.

Such debentures are extremely speculative and returns from these debentures may be realised only a reorganisation or liquidation.

Note:

1. CRISIL may apply + (plus) or – (minus) signs for ratings from AA to D to reflect comparative standing with category.
2. The contents within parenthesis are a guide to the pronunciation of the rating symbols.
3. Preference share rating symbols are identical to debenture rating symbols except the letters Pp are prefixed to the debenture rating symbols, e.g. Pp AAA.

Rating Symbols used for Fixed Deposits

FAAA – Very strong degree of safety

FAA – Strong degree of safety

FA – Satisfactory safety

FB – Inadequate safety

FC – Safety in doubtful

FD – Issue in default or likely to be in default

Rating Symbols used for short-term instruments

P1 – Very strong degree of safety

P2 – Strong degree of safety

P3 – Adequate degree of safety

P4 – Minimal degree of safety

P5 – In default or likely to be in default

CRISIL may apply + (plus) or – (minus) for its rating symbols to indicate the relative position within the rating category.