POLICY FOR PLACING RATINGS ON CREDIT WATCH




There are many developments take place in the affairs and functioning of various rated entities, the ultimate implication of the same on debt servicing ability of such entities may not be evaluated & measured instantly in view of many uncertainties and non-happening of many related events. At times, the evaluation & measurement of the aforesaid implications is a time consuming affair and hence, Infomerics may not take a call about the rating immediately. These developments include announcement for merger, demerger, taking over of a company, implementation of a large project, sell or acquisition of equity stake in the company, change of management, resignation of a key managerial personnel and so on.

In such cases, Infomerics initiates review exercise with a view to measure the impact of such developments on the future functioning & debt servicing of the company. Wherever Infomerics feels that measurement of the impact of the development will take time and believes that such measurement might result into change in rating, Infomerics puts such rating under Credit Watch, duly approved by its Rating Committee (RC).

Such    credit watch may be for positive implication or negative implication or where the direction of the implication is not predictable, then the rating may be kept on credit watch for a developing implication.

Once the evaluation exercise is over, the matter is put up before the RC by way of a detailed note for review and reassignment of the rating. At that point of time, the credit watch is lifted and the appropriate rating is assigned.