Last Reviewed On: March 31, 2023 (Version 6)

1. For the purpose of surveillance and review, Acuite calls for information / data from rated entities. In terms of the Agreement entered into by the issuer/borrower with Acuite, the former is, inter alia, required to:
1. Furnish on a continuous basis all information in a timely manner as may be required by Acuite during the lifetime of the facility(s) / security(s) rated by Acuite and
2. Pay the annual surveillance fee and all other charges billed by Acuite in full.
3. Furnish No Default Statement (NDS) on a monthly basis

2. Acuite shall follow a uniform practice of three consecutive months of non-submission of No Default Statement (NDS) by the borrower / issuer (or inability to validate timely debt servicing through other sources including but not limited to lender / trustee feedback) as a ground for considering migrating the ratings to "Issuer Not Cooperating” (INC) and shall tag such ratings as INC within a period of 7 days of three consecutive months of non-submission of NDS. Acuite in its judgement may migrate a rating to the INC category before the expiry of three consecutive months of non-receipt of NDS. However, this will not apply where the issuer is able to establish (i) technical or procedural issues for NDS submission to the satisfaction of Acuite OR (ii) a track record of timely debt servicing for the period as stipulated above.

   These guidelines will not apply to outstanding ratings in the 'C' and 'D categories as such issuers are expected to be delaying or defaulting on their unrated and rated debt servicing obligations. A monthly statement that confirms default is not expected to trigger any further rating action.

3. Steps to be taken under various scenarios in order to ascertain the status of non-cooperation by the issuer company:
1. In case the rated entity does not provide the information called for by Acuite and does not respond to telephonic follow ups by Acuite personnel, Acuite shall send a reminder through email / letter to the rated entity.
2. Similarly, in case the annual surveillance fee and any other amounts payable to Acuite are not paid in full and on time, Acuite will remind the rated entity to pay the annual surveillance fee and all other amounts payable to Acuite through email / letter.
3. The issuer entity fails to submit No-Default Statement (NDS) for three consecutive months and Acuite is not able to validate timely debt servicing through any other means.
4. Acuite seeks event-specific, time-sensitive information beyond the minimum required information and the issuer fails to furnish the same.
5. Non-submission of material information including (but not limited to) the following:

a. Non-submission of quarterly financial results or performance results or audited financial results within prescribed timelines

b. Current and past operational details including details about capex plans

c. Debt obligations and repayment details

d. Any other issue felt appropriate by Acuite as per internal assessment or as laid down by Acuite in its internal policy / manual.

6. For any one or more reasons as stated above, the entity will be considered as a non-cooperating entity and accordingly the rating (including if necessary a downward transition) will be flagged as "Issuer Not Cooperating” (INC).


4. "Assessing the risk of non-availability of information from the issuers”: An instance where an issuer (whether or not flagged off as INC) has failed to cooperate (please refer point 3 above), is considered by Acuite to be fraught with serious information risk. Such risks may also manifest due to non-cooperation by issuer in sharing additional information (that goes beyond the standard, minimum information) and is event-specific and / or is time-sensitive in nature usually emanating from an event that at times only the issuer entity (unlisted) may be privy to. If Acuite is of the opinion that lack of cooperation by such an entity coupled with information risk makes the currently outstanding rating untenable, Acuite may take necessary rating action that may include a multi-notch rating transition. In addition to publishing the Press Release, Acuite may also, update the lender(s) / investor(s) with the rating action so taken.


5. If an issuer has outstanding ratings as non-cooperative for more than 6 months, then Acuite shall downgrade the rating assigned to the security of such issuer to non-investment grade with INC status.


6. Acuite will not assign a new rating(s) to an issuer if the issuer has its outstanding rating(s) tagged as "Issuer not cooperating” with all other Credit Rating Agencies (CRAs) for a continuous period of preceding 12 months. For Acuite to assign a new rating(s), the issuer will have to resume cooperation with at least one existing CRA (for issuers with outstanding ratings from 2 or more CRAs) and have the tag "Issuer not cooperating” removed in the latest press release OR have its rating(s) - (tagged as "Issuer not cooperating”) - withdrawn from its existing CRA(s). In cases where a rating agreement was executed (between an issuer and Acuite) before 12 months (from the date of publication of PR with the INC flag by previous CRA), the rating process culminating in publishing of Press Release (after acceptance of rating assigned by Acuite) will necessarily have to be before the expiry of 12 months from the date of publication of PR with the INC flag by the other CRA for that issuer.


7. Acuite has published minimum / indicative information requirement for various sectors or types of ratings which is accessible through this link.