Policy on Withdrawal of Ratings

POLICY ON WITHDRAWAL OF RATINGS

Credit rating assigned by Infomerics Ratings to debt instrument and/or bank loans/facilities of an entity shall not generally be withdrawn while the instrument/facility is outstanding.

Debt Instrument

In case the debt instrument is redeemed in full by the issuer, then Infomerics Ratings shall withdraw the rating based on a written request by the issuer to that effect accompanied by a certificate from the statutory auditor/ debenture trustee/registrar of the issuer certifying that the rated instrument has been redeemed in full and further certifying that there are no claims against and/or dues pending or outstanding towards the lender/investor by the issuer in respect of the rated instrument.

Infomerics Ratings shall also withdraw the rating assigned to a debt instrument on a written application made by the issuer, if

• The issuer has not and does not propose to issue the rated debt instrument;
• The issuer is wound up or merged or amalgamated with another company.

Bank facilities

In case of bank loans/facilities, Infomerics Ratings shall withdraw the rating(s) assigned based on a written application by the rated entity in the following circumstances:

• If the bank loans/facilities are repaid fully, duly certified by the banker(s) of the rated entity, and the rated entity does not want to avail of the bank facilities anymore and has surrendered such facilities;
• The rated entity is wound up or merged or amalgamated with another entity, but there are outstanding bank loans and/or against the bank facilities;
• If a No Objection Certificate (NOC) is issued by the lending banker(s) of the rated entity even if there are outstanding bank loans and/or against the bank facilities. Such NOC shall specifically mention that the bank has no objection to Infomerics withdrawing the rating.
• At the time of withdrawal, Infomerics shall assign a rating to such facility and issue a press release as per SEBI directives, for which the clients shall cooperate in review of the existing rating by submitting the required documents. In case of Issuer Rating, Infomerics shall withdraw the same based on the request of the issuer/rated entity or in order to comply with SEBI regulations issued from time to time.

Mutual Fund Ratings

In case of open-ended Mutual Fund schemes of Asset Management Company (AMC), Infomerics Ratings shall withdraw the rating assigned based on a written request given by the AMC. Prior to withdrawal, the rating so assigned shall be placed on notice of withdrawal in the company’s website for a period of 30 days. Likewise, the rated mutual fund has to disclose this aspect of notice of withdrawal in the respective mutual fund’s website.

Debt instruments like Bonds, NCDs etc. – Special circumstances

a) Rating of debt instruments like Bonds, NCDs of an entity may be withdrawn based on the rated entity’s request, subject to having:

i) rated the instrument continuously for 5 years or 50 per cent of the tenure of the instrument, whichever is higher;

ii). Received an undertaking from the issuer that a rating is available on that instrument; and

iii) the request for withdrawal from the rated entity is accompanied by an undertaking from another CRA that a rating is available on that security.

b) In case of multiple ratings on an instrument (where there is no regulatory mandate for multiple ratings)

Infomerics may withdraw a rating earlier than (a) above provided Infomerics

1.  has rated the instrument continuously for 3 years or 50 per cent of the tenure of the instrument, whichever is higher; and
2. received NOC for withdrawal of rating from 75% of bondholders by value of the outstanding debt; and
3. received an undertaking from the issuer that another rating is available on that instrument; and
4. the request for withdrawal from the rated entity is accompanied by an undertaking from another CRA that a rating is available on that security.

At the time of withdrawal, Infomerics shall assign a rating to such instrument and issue a press release.

In case of withdrawal in circumstances a) and b) above, Infomerics shall continue to track the confirmation received from the debenture trustees on the status of debt servicing on securities even after rating withdrawal.

Withdrawal of Rating for Perpetual Debt Securities that are listed or proposed to be listed on a recognized stock exchange:

• Ratings of perpetual debt securities that are listed or proposed to be listed on a recognized stock exchange may be withdrawn provided that Infomerics has
  • Rated such security/ies continuously for 5 years;
  • received an undertaking from the Issuer that a rating is available on such security/ies; and  
  • The request for withdrawal from the rated entity is accompanied by an undertaking that a rating is available on that security from another CRA.

General

In all circumstances, Infomerics Ratings shall withdraw the rating(s) provided the issuer/rated entity shall have paid all the surveillance and rating fees and other amounts in full that are due and payable to Infomerics Ratings. The ratings shall not be withdrawn to avoid negative rating actions.

Last Updated on May 2024  

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