Certificate of Deposit

Infomerics rates fixed deposit (FD) programmes floated by banks, deposit-taking non-banking finance companies (NBFCs), and corporates in the non-financial sector. FDs allow companies to diversify their funding source. Under an FD programme, an issuer accepts varying amounts of deposits for different tenors from multiple investors. Hence, the deposits are highly granular, with their maturities staggered across time horizons. Also, a considerable portion of FDs are renewed on maturity. FD repayments, therefore, tend to exert less pressure on the issuer’s liquidity. Infomerics employs a dedicated rating scale for FDs, and the rating of an issuer’s FD programme is derived from its long-term credit rating. The rating takes into account factors such as the issuer’s liquidity, the programme’s granularity, staggered maturity profile, and the renewal rate.

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