Standardizing and Strengthening Policies on Provisional Rating by Credit Rating Agencies (CRAs) for Debt Instruments

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....o consultation with various stakeholders, including credit rating agencies, it has been decided to prescribe as under: 2.1. Rating Symbol: All Provisional Ratings ('long term' or 'short term') for debt instruments shall be prefixed as 'Provisional' before the rating symbol in all communications viz. rating letter, press release / rating rationale, etc. 2.2. Standardized Term: A rating shall be considered as provisional, and not final, when it is contingent upon occurrence following steps or execution of following documents, as applicable: a) execution of letter of comfort, corporate guarantee, or other forms of explicit third-party support; b) execution of documents such as debenture trust deed/ debenture trustee agreement, legal ag....

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.... 2.4. Disclosures in the press release / rating rationale: In addition to the disclosures already made by Credit Rating Agencies, the following disclosures shall be included in press release / rating rationale while assigning provisional ratings: a) pending steps/ documentation considered while assigning provisional rating. b) risks associated with the provisional nature of the credit rating, including risk factors that are present in the absence of completed documentation / steps. c) rating that would have been assigned in absence of the pending steps/ documentation considered while assigning provisional rating. In cases where the absence of said steps/ documentation would not result in any rating being assigned by the CRA (for ins....